Rural Marketing Final

Acknowledgement

This project is an attempt to study rural India with help of live case study of

Lifebuoy of HLL in India.

For this we would like thank our Rural marketing faculty S. Maninder Singh

who has shown us right approach and way to make this project and

without whose guidance this project would have been difficult to complete.

We are also grateful to our institute for providing this opportunity and

providing the required material whenever needed

Rural Marketing- Lifebuoy 1

Introduction- Upcoming of Rural Marketing in

India

The rural India has a plethora of opportunities all waiting to be harnessed.

Not surprisingly, it has become the latest marketing buzzword for most of the

FMCG majors. Many of the FMCG companies are busy formulating their rural

marketing strategy to tap the chance .To name few companies showing deep

interest in rural India are HLL, Marico industries, Colgate – Palmolive and

Britannia Industries.

Why Rural India?

70 % of India’s population lives in 627000 villages in rural areas. 90 % of the

rural population is concentrated in villages with a population of less than

2000, with agriculture being the main business. This simply shows the great

potentiality rural India has to bring the much-needed volumes and help the

FMCG companies to bank upon the volume –driven growth. This brings a boon

in disguise for the FMCG Company who has already reached the plateau of

their business curve in urban India.

As per the National Council for Applied Economic Research (NCAER) study,

there are as many 'middle income and above' households in the rural areas

as there are in the urban areas. There are almost twice as many 'lower

middle income' households in rural areas as in the urban areas. At the

highest income level there are 2.3 million urban households as against 1.6

million households in rural areas.

According to the NCAER projections, the number of middle and high-income

households in rural India is expected to grow from 80 million to 111 million by

2007. In urban India, the same is expected to grow from 46 million to 59

million. Thus, the absolute size of rural India is expected to be double that of

urban India.

MARKETING STRATEGY:


In-depth knowledge of the village psyche, strong distribution channels and

awareness are the prerequisites for making a dent into the rural market.

The psyche: the price sensitivity of a consumer in a village is something the

rural marketers should be aware of. The strategy revolves around what

attracts the rural customers to a product. For e.g. packaging. The rural

customers are generally the daily wage earners and thus they don’t have the

monthly incomes like their urban counterpart has .So it makes sense,

packaging in smaller units and lesser-priced packs to increase their

affordability. Colour that attracts them is also important. Convenience is the

other key word. Here Colgate is the apt example. First of all it made sachets

as was required by their income streams. Secondly –since many households

don’t have proper bathroom and only have a window similar things so it

made sense to cap these sachets for convenience of storage while use.

Britannia with its Tiger brand of biscuits with its low priced and conveniently

packaged products became some of the success story in rural marketing.

Distribution channel:

Study on buying behaviour of rural consumer indicates that the rural retailers

influences 35% of purchase occasions. Therefore sheer product availability

can affect decision of brand choice, volumes and market share. Some of the

FMCG giants like HLL took out project streamline to significantly enhance the

control on the rural supply chain through a network of rural sub-stockists,

who are based in the villages only. Apart from this to acquire further edge in

distribution HLL started Project Shakti in partnership with Self Help groups of

rural women.

Awareness:

Mass media is able to reach only to 57% of the rural population Creating

awareness then, means utilizing targeted, unconventional media including

ambient media .For generating awareness, events like fairs and festivals,

Haats etc. are used as occasions for brand communication. Cinema vans,

shop-fronts, walls and wells are other media vehicles that have been utilized


to increase brand and pack visibility. Ideas like putting stickers on the hand

pumps, walls of the wells putting on tin plates on al the tree surrounding the

pond are some of the innovative media used by personal wash like Lux and

Lifebuoy and fabric wash items like Rin and Wheel. Idea was to advertise not

only at the point of purchase but also at the time of consumption.

Definitely there is lot of money in rural India. But there are hindrances at the

same time .The greatest hindrance is that the rural market is still evolving

and there is no set format to understand consumer behaviour .Lot of study is

still to be conducted in order to understand the rural consumer. Only FMCGs

with deeper pockets, unwavering rural commitment and staying power will be

able to stay longer on this rural race.


Hindustan Lever Limited

Meeting Everyday Needs of People Everywhere

Hindustan Lever Limited (HLL) is India's largest fast moving consumer goods

company, with leadership in Home & Personal Care Products and Foods &

Beverages. HLL's brands, spread across 20 distinct consumer categories,

touch the lives of two out of three Indians. They endow the company with a

scale of combined volumes of about 4 million tonnes and sales of Rs.10,000

crores.

The leading business magazine, Forbes Global, has rated Hindustan Lever as

the best consumer household products company. Far Eastern Economic

Review has rated HLL as India’s most respected company.

The vision that inspires HLL's 32,400 employees (40,000 including Group

Companies), including about 1,425 managers, is to “meet everyday needs of

people everywhere - to anticipate the aspirations of our consumers and

customers and to respond creatively and competitively with branded

products and services which raise the quality of life.” This objective is

achieved through the brands that the company markets.

It is an ethos HLL shares with its parent company, Unilever, which holds

51.55% of the equity. A Fortune 500 transnational, Unilever sells Foods and

Home and Personal Care brands through 300 subsidiary companies in about

100 countries worldwide with products on sale in a further 50.

Business nature

HLL is India's largest marketer of Soaps, Detergents and Home Care

products. It has the country’s largest Personal Products business, leading in

Shampoos, Skin Care Products, Colour Cosmetics, and Deodorants. HLL is

also the market leader in Tea, Processed Coffee, branded Wheat Flour,

Tomato Products, Ice cream, Soups, Jams and Squashes.

HLL is also one of the country's biggest exporters and has been recognised as

a Golden Super Star Trading House by the Government of India; it is a net

foreign exchange earner. HLL is India's largest exporter of branded fast

moving consumer goods.


Products, Basmati Rice, Castor Oil and its Derivatives. It is India's largest

exporter of MarineProducts, and one of the largest global players in castor.

Market leading brands

HLL’s brands have become household names. The company’s strategy is to

concentrate its resources on 30 national power brands, and 10 other brands

which are strong in certain regions.

The top five brands together account for sales of over Rs.3000 crores. Each of

these mega brand has a potential scale of Rs.1000 crores in the foreseeable

future. Some of the big brands in Soaps and Detergents are Lifebuoy, Lux,

Liril, Hamam, Breeze, Dove, (all soaps), Surf Excel, Surf, Rin, Wheel (the

number one detergent brand in India, and HLL's

largest), 501, Sunlight (all detergents). HLL also markets the Vim and Domex

range of Home Care Products.

In the Personal Products business, HLL's Hair Care franchises are Clinic,

Sunsilk and Lux shampoos; the company markets Nihar oil. In Oral Care, the

portfolio comprises Close-up and Pepsodent toothpastes and toothbrushes. In

Skin Care, HLL markets Fair & Lovely Skin Cream and Lotion, the largest

selling Skin Care Product in India; a brand developed in India, it is now

exported to over 30 countries. It has been extended as an Ayurvedic cream,

an under-eye cream, a soap and a talc, in line with the strategy to take

brands across relevant categories. The other major Skin Care franchises are

Pond’s, Vaseline, Lakme and Pears. In Colour Cosmetics, HLL markets the

Lakme and Elle-18 ranges. In Deodorants, the key brands are Rexona, Axe,

Denim and Pond's, while the

Talc brands are Pond's, Liril, Fair & Lovely, Vaseline and Lifebuoy. Axe and

Denim are HLL’s franchises for Men’s toiletries. HLL has recently launched

Lever Ayush Ayurvedic Health & Personal Care Products.

HLL has started franchised Lakme Beauty Salons, offering standardised

services, in line with the strategy to add a service dimension to relevant

brands.


HLL is one of the world’s largest packet Tea marketer. Its Tea brands – Taj

Mahal, Red Label, Taaza, A1, 3Roses - are among the top brands in the

country; it also markets Lipton Ice Tea.

HLL and Pepsi have formed an alliance to distribute a full range of tea and

coffee and softbeverages through vending machines; HLL already has a base

of around 15000 such machines.

This list is not a comprehensive list of brands of HLL.

Financial Position of HLL

(updated 03-Dec-03)

Share Information03/12/2003

Recent Price (Rs)178.9

Volume 930565

Year To Date High (Rs) 200

Year To Date Low (Rs) 135

Face Value (Rs) 1

Market Capitalization (Rs Crore) 39379.47

Shares Outstanding (Lakhs) 22012

Market Lot 1

Valuation RatiosYear End - Dec 2002

Price/Earnings 22.42

Price/Book 10.76

Price/Sales 3.6

Dividend Yield (%) 3.07

Per-Share DataYear End - Dec 2002

Book Value (Rs) 16.62

Cash (Rs) 4.28

Dividend (Rs) 550

Sales (Rs) 49.65

Earnings (Rs) 7.98

Income StatementYear End - Dec 2002 (Rs Crore)

Income StatementLatest Quarter - Sep 2003 (Rs Crore)

Sales 2467.49

Other Income 141.44

Operating Profit 622.92

Interest 31.3

Depreciation 29.61

Net Profit 443.22

ProfitabilityYear End - Dec 2002

Operating Profit Margin 21.77 %

Net Profit Margin 16.07 %

Balance Sheet & Cash FlowYear End - Dec 2002 (Rs Crore)

Equity Capital 220.12

Reserves & Surplus 3438.75

Long Term Debt 50.6

Short Term Debt 7.7

Cash 942.63

Management EffectivenessYear End - Dec 2002

Return on Assets 65.6 %

Return on Equity 52.4 %

Financial StrengthYear End - Dec 2002


Sales 10928.36

Other Income 454.86

Operating Profit 2378.81

Interest 9.18

Depreciation 134.1

Net Profit 1755.68

Current Ratio 1.02

Total Debt/Equity 0.02

Lifebuoy When we talk about HLL the first name that comes to our mind is Lifebuoy.

It is the world’s largest selling soap and offers a stronger health benefit to the

entire family

Launched in the year 1895, Lifebuoy, for over a 100 years, has been

synonymous with health and value. The brick red soap, with its perfume and

popular Lifebuoy jingle have carried the Lifebuoy message of health across

the length and breadth of the country, making it the largest selling soap

brand in the world.

In 2002 Lifebuoy was relaunced, marking a new turning point in its history.

The new mix includes a new formulation and a repositioning of the brand to

make it more relevant to both new and existing consumers.

Lifebuoy is no longer a carbolic soap with cresylic perfume. It is now

a milled toilet soap with a new health fragrance. The new formulation

has an ingredient, Active-B, which offers protection against germs, which can

cause stomach infection, eye infection and infections in cuts and bruises. The

new health perfume has been selected after one of the most extensive

perfume hunts in the industry. The new milled formulation offers a

significantly superior bathing experience and skin feel. The new formulation,

new health perfume and superior skin feel, along with the popular red colour,

have registered conclusive and clear preference among existing and new

users.

The new Lifebuoy is targeted at today’s discerning housewife with a more

inclusive “family health protection for my family and me” positioning.


Lifebuoy has made a deliberate shift from the male, victorious concept of

health to a warmer, more versatile, more responsible benefit of health for the

entire family.

The new Lifebuoy range now includes Lifebuoy Active Red (125gm, 100 gm

and 60 gm) and Lifebuoy Active Orange (100gm). Lifebuoy Active Orange

offers the consumer a differentiated health perfume while offering the health

benefit of Lifebuoy.

At the upper end of the market, Lifebuoy offers specific health benefits

through Lifebuoy International (Plus and Gold). Lifebuoy International Plus

offers protection against germs which cause body odour, while Lifebuoy

International Gold helps protect against germs which cause skin blemishes.

Repositioning of Lifebuoy

FMCG major Hindustan Lever Ltd (HLL) is to embark on a massive rural

campaign using the concept of hygiene as a platform to reposition its leading

brand, Lifebuoy.

Lifebuoy is the single largest soap brand — with 20 lakh soaps sold every day

and an estimated value of Rs 500 crore (600 million users annually).

HLL has identified 8-9 key States for commencing its rural contact

programme wherein the concept of hygiene will be highlighted. The relaunch

of the 107-year-old Lifebuoy has been done in a bid to drive growth in a

sluggish soap market.

It is expected to propel the growth to double-digit levels during 2002.

Lifebuoy has been declining by 15-20 per cent in volume terms until HLL

launched Lifebuoy Active during the second half of 2001.

The new Lifebuoy is a completely new product with a new

fornulation, fragrance, lather profile and a shift in positioning from

being a male soap to a family soap.


The carbolic segment, under which Lifebuoy fell, shrunk in the process giving

way to an explosive growth in the discount segment in which HLL's Breeze is

positioned.

Seventy per cent of the Lifebuoy sales were from rural India.

Rural consumers' query `why do I need Lifebuoy when all soaps clean' was

indicative of the decline of the brand, prompting HLL to launch Lifebuoy

Active and Lifebuoy Extra Strong in mid 2001. "These launches led to a

marginal turnaround, but 2002 is the year of growth.

Lifebuoy is no longer a carbolic soap with cresylic perfume, it is a

toilet soap with a different `health' fragrance. With this launch, the

carbolic segment has been wiped out as Lifebuoy accounted for 95

per cent of this segment previously. In the process of change, HLL

challenged everything that Lifebuoy stood for - perfume, formulation, size

and shape. "Every element of communication was changed

"The first phase of communication was to tell consumers that Lifebuoy has

changed. From an earlier focus on men, the focus has shifted to

family with the message that Lifebuoy is for effective protection

from germs that cause health problems.

The new range includes Lifebuoy Active Red, Lifebuoy Active Orange,

Lifebuoy International Plus and Lifebuoy International Gold.

In 2001, HLL's soaps and detergents turnover was at Rs 4,295 crore,

accounting for 39 per cent of its total net turnover of Rs 10,972 crore.

Hindustan Lever Ltd (HLL) is attempting to give a new lease of life to its 107-

year-old heritage brand by extending it to talcum powder and also testing a

herbal variant of this power brand. While the upper-end consumers would use

deodorants, a Lifebuoy powder could work for consumers in the lower strata

who are already familiar with the soap."


Project Shakti

Empowering womenfolk through a wired network for linkage activities or

connecting the rural with urban world is the new mantra adopted by many

FMCGs to sell their products as well as improve the lot of rural women.

Indeed, a win-win partnership for both womenfolk and the company.

This has been made possible due to the initiatives taken up by Hindustan

Lever Ltd (HLL) for an exclusive project called Shakti through which women in

a remote village can access happenings around the world.

As part of this commitment, HLL is leveraging on Self-Help Groups (SHGs) as

they become direct-to-home (DTH) dealers in line with other micro credit

models

To be implemented initially as a pilot project in the Nalgonda district of

Andhra Pradesh, Shakti is expected to spread its roots across all the districts

of Andhra Pradesh. It will be integrated with its Project Shakti programme,

which is a linkage of women SHGs with private sector companies.

There are about 300 Shakti dealers in the state with about 40 dealers in

Nalgonda. Working on a cluster approach, the Shakti programme operates

through Shakti dealers who market HLL products and use their services for

stocking their produce.


Besides health education, there is also an option of ‘e-learning’ to prepare

home foods like pickles and curry powders among other things. i-Shakti will

also help women to know about crop protection, weather forecasting, soil

conditions, cropping patterns in different weather besides integrated pest

management practices.

The whole operation is primarily through SHGs who act as direct dealers in

the rural markets of HLL. The Project Shakti programme is facilitated by the

District Rural Development Agency (DRDA) of Nalgonda district.

From the time HLL's new distribution model, named Project Shakti, was

piloted in Nalgonda district in 2001, it has been scaled up and extended to

over 5,000 villages in 52 districts in AP, Karnataka, Gujarat and Madhya

Pradesh with around 1,000 women entrepreneurs in its fold. The vision is

ambitious: to create by 2010 about 11,000 Shakti entrepreneurs covering

one lakh villages and touching the lives of 100 million rural consumers.

How it works

Typically, a woman from a SHG selected as a Shakti entrepreneur receives

stocks at her doorstep from the HLL rural distributor and sells direct to

consumers as well as to retailers in the village.

Each Shakti entrepreneur services 6-10 villages in the population strata of

1,000-2,000 people

A Shakti entrepreneur sets off with 4-5 chief brands from the HLL

portfolio - Lifebuoy, Wheel, Pepsodent, Annapurna salt and Clinic

Plus. "These are the core brands, they we layer it with whatever else

is in demand like talcum powder or Vaseline during winters. These

brands apart, other brands which find favour with a rural audience are: Lux,


Ponds, Nihar and 3 Roses tea. Typically, unit packs are small. All the brands

are national and HLL is cool to the idea of creating a rural-specific

brand as it will only dissipate the advertising media effort for the

brands. To get started the Shakti woman borrows from her SHG and the

company itself chooses only one person. With training and hand-holding by

the company for the first three months, she begins her door-to-door journey

selling her wares.

The future of Shakti

Having perfected the model in Nalgonda, in 2003 HLL plans to extend Shakti

to a 100 districts in Madhya Pradesh, Gujarat and UP. There are other plans

brewing. One is to allow other companies which do not compete with HLL to

get onto the Shakti network to sell their products. The most powerful aspect

about this model, is that it creates a win-win partnership between HLL and

its consumers, some of whom will also draw on the organisation for their

livelihood, and it builds a self-sutaining virtuous cycle of growth for all.

The next stage of Project Shakti is even more ambitious. HLL is now in the

process of piloting `I-Shakti', an IT-based rural information service that

will provide solutions to key rural needs in the areas of agriculture, education,

vocational training, health and hygiene. The project will be piloted in

Nalgonda district again. Based on a palm pilot. Women in the rural areas are

the catalyst of change and that is why its whole programme keeps women in

focus. It’s the rural women who give Shakti its strength.


THERE are about 4.36 lakh women self-help groups in Andhra Pradesh

covering nearly 58.29 lakh poor women. AP alone has about half of the SHGs

organised in the country.

PROMOTION

Media's strategy for Lifebuoy soap's re-launch:

Lifebuoy contributed 30 per cent to the Hindustan Lever detergent

business turnover and hadn't undergone a major restructuring and

repositioning in 107 years. However, the sales were declining as the

consumers were moving away from the carbolic based soaps to

beauty soaps - perceived to be superior; with better fragrance and

lather; aspirational image.


The agency devised a strategy to ensure that it advocated family

health rather than personal hygiene. There were large chunks of the

users who were in "unreachable areas" - rural markets. Through TV and

print campaigns, the agency team focused attention on the family health

themes, conducted consumer education exercise using "Germ tests"

through multimedia; and established the brand's credentials as an

authority in a credible manner. The agency also explored the communication

options during important days such as World Health Day. For rural

markets, it created the Lifebuoy Swashthya Chetana project wherein

450 teams of health officers tapped 8000 villages in 11 states.

Nearly 40 million people in rural areas were covered. The brand

registered a 30 per cent increase in volumes and the share of

contribution to HLL's detergent division turnover increased to 55 per

cent.

HLL was also offering cross company product mixes - a 200 gm Bru packet

comes with one Cadbury's Dairy Milk; Red Label tea packet comes with

Cadbury's Five Star depending on the size; 100 gm Lifebuoy comes with a

small Amrutanjan.

HLL used Mahakumbh mela as an opportunity to change hand-washing

and bathing habits in rural India. "The Mahakumbh” at Allahabad is the

biggest mela in India and, with its focus on `cleansing' is a good fit for

the `Lifebuoy for health' message of the brand". innovative

communication tools were used at the mela to communicate the

importance of health and hygiene. " The company 14 stalls at various

points in the mela grounds. Some hand-carts have also been deployed

for increasing access. The numbers of both was increased based on

response. ``The activity aims to build awareness in the target audience

about hygiene and health through product demonstrations".

People in Mela were asked to put there hands below some special camera

where the7y could see the germs on their hands and were asked to wash


their hands with lifebuoy and then see the difference. These type

ofpromotional activities worked in these melas.

Cinema van operations

These are typically funded by the Redistribution Stockists. Cinema

Van Operations have films and audio cassettes with song and dance

sequences from popular films, also comprising advertisements of

HLL products.

Operation Harvest

The reach of conventional media and, therefore, awareness of

different products in rural markets is weak. It was also not always

feasible for the Redistribution Stockist to cover all these markets

due to high costs involved. Yet, these markets are important since

growth opportunities are high.

Operation Harvest endeavoured to supplement the role of

conventional media in rural India and, in the process, forge

relationships and loyalty with rural consumers. Operation Harvest

also involved conducting of product awareness programmes on vans.

Project Shakti is working for HLL to be a great promotional Project

and work in both terms that is Promotion as well as Distribution with

socal welfare as it gives employment to rual women and increase

their income.


Hindustan Lever Limited's Lifebuoy, recently

announced the launch of Lifebuoy Swasthya Chetna,

the first single largest rural health and hygiene

educational program. Lifebuoy will make multiple

repeat contacts in nearly 15,000 villages in 8 states

across rural India. The campaign aims to educate children and the community about the

threat of unseen germs and basic hygiene practices. Lifebuoy has already successfully

conducted pilot studies in Madhya Pradesh, Chattisgarh, Uttar Pradesh, West Bengal,

Orissa and Bihar. This campaign teaches people about maintaining good health through

practice of basic hygienic habits including the handwash habit.

Lifebuoy is among HLL's power brands, which the company is focusing on,

selected on the basis of their absolute size, brand strength, brand relevance,

competitive advantage and potential for growth. The new Lifebuoy range now

includes Lifebuoy Active Red (125 gm, 100 gm, and 60 gm) and Lifebuoy

Active Orange (100 gm). Lifebuoy Active Orange offers the consumer a

differentiated health perfume while offering the health benefit of Lifebuoy. At

the upper end of the market, Lifebuoy offers specific health benefits through

Lifebuoy International (Plus and Gold). Lifebuoy International Plus offers

protection against germs which cause body odour, while Lifebuoy

International Gold helps protect against germs which cause skin blemishes.


PRICE

Hindustan Lever Ltd (HLL) currently on a price discount include 150

gm Lifebuoy Gold (Rs 3 off),

TRYING to match prices with the smaller players, large FMCG companies have

been on a price-cutting spree. Of late, Hindustan Lever have announced

`new' prices for their various brands to beat sluggish sales, combined with

the introduction of lower-sized packs to get volumes.

HLL is also expected to follow suit with its Surf sachets with the obvious

purpose of gaining volumes at the lower end of the market.

HLL managers describe the exercise as that of dropping price barriers to

induce growth for their brands rather than trying to beat the smaller

players with their pricing. More than benchmarking competition, dropping

prices is all about triggering growth and this has always been an integral part

of their strategy. Straddling almost every price segment with its SKUs, HLL

has also been trying to upgrade its consumers, even at the cost of

cannibalising its own brands.

Besides, freebies and promotions have finally been replaced by direct price

reductions to lure consumers. Observes Sujoy Mishra, an analyst at Kotak

Securities, "Promotions have shifted to the trade while freebies have

been replaced by price cuts." Considering almost every FMCG brand was

doling out a freebie, it was time for FMCG players to differentiate themselves.

Observes A. Sundarajan, Managing Director of market research firm, Market

Search, "The round of freebies has already been played out by the

FMCG companies. They are now coming back to their core brands at

a lower price."

In spite of the slowdown in rural demand, FMCG companies continue to focus

on the rural markets in the hope of salvaging their sales turnover. Majors

such as HLL have deliberately introduced small pack sizes. Lifebuoy,


HLL's largest selling soap brand, recently introduced a Rs 2 SKU of

18 gm targeted at the rural market in the Bimaru States.

PLACE

70% of India's population resides in villages. Penetrating the rural

markets is, therefore, one of the key challenges for any marketer. While rural

markets present a great opportunity to companies, they also impose major

challenges.

At HLL, they have been at the forefront of experimenting with

innovative methods to reach the rural consumer.

Single Distribution Channel

For rural India, HLL has established a single distribution channel by

consolidating categories. In a significant move, with long-term

benefits, HLL has mounted an initiative, Project Streamline, to

further increase its rural reach with the help of rural sub-

stockists. It has already appointed 6000 such sub-stockists. As a

result, the distribution network directly covers about 50,000

villages, reaching about 250 million consumers.

Distribution will acquire a further edge with Project Shakti, HLL's

partnership with Self Help Groups of rural women. The project,

started in 2001, already covers over 5000 villages in 52 districts of

Andhra Pradesh, Karnataka Madhya Pradesh and Gujarat, and is being

progressively extended. The vision is to reach over 100,000 villages,

thereby touching about 100 million consumers. The SHGs have

chosen to adopt distribution of HLL's products as a business

venture, armed with training from HLL and support from

government agencies concerned and NGOs. A typical Shakti

entrepreneur conducts business of around Rs.15000 per month, which

gives her an income in excess of Rs.1000 per month on a sustainable


basis. As most of these women are from below the poverty line,

and live in extremely small villages (less than 2000 population),

this earning is very significant, and is almost double of their past

household income. For HLL, the project is bringing new villages

under direct distribution coverage. Plans are being drawn up to

cover more states, and provide products/services in agriculture,

health, insurance and education. This will both catalyse holistic

rural development and also help the SHGs generate even more

income. This model creates a symbiotic partnership between HLL

and its consumers, some of whom will also draw on the company

for their livelihood, and helps build a self-sustaining virtuous

cycle of growth.

The marketplace in India is as varied in its diversity as it is complex

in its nature.

Urban Cities/Towns 3768

Population 258 million

Rural Villages 627000

Population 698million

Outlets 3768

Urban India

Population Strata Number of Towns % of Population

>1 Lakh 309 64.9

50000 - 1 Lakh 358 11

20000 – 50000 968 13.3

10 - 20000 183 7.9

5 – 10000 757 2.6


> 5000 192 0.3

Rural India

Population Strata Number of Towns % of Population

> 10,000 1,831 0.3

5 - 10,000 7,145 1.3

2 - 5,000 46,754 8.4

1 - 2,000 94,658 16.9

500 - 1,000 136,232 24.7

< 500 340,380 48.7

Hindustan Lever Limited’s (HLL) RS Net initiative, which aims at

connecting Redistribution Stockists (RSs) through an internet based

system, now covers stockists of the Home & Personal Care business and

Foods & Beverages in close to 1200 towns and cities. Together they account

for about 80% of the company's turnover.

RS Net is one of the largest B2B e-commerce initiatives ever undertaken in

India. It provides linkages with the RSs’ own transaction systems,

enables monitoring of stocks and secondary sales and optimises

RS’s orders and inventories on a daily basis. Information on secondary

sales from Gandhidham to Guwahati is now available on RS Net every day.

Launched in 2001, RS Net is part of Project Leap, HLL’s end-to-end supply

chain initiative. Project Leap begins with the supplier runs through the

factories and depots and reaches up to the RSs. The objective is to

catalyze HLL’s growth by ensuring that the right product is available


at the right place in the right quantities and at the right time. Leap

also aims at reducing inventories and improving efficiencies right through the

extended supply chain.

RS Net has come as a force multiplier for HLL Way, the company's

action-plan to not only maximise the number of outlets reached but also to

achieve leadership in every outlet. RS Net has enabled stockists to place

orders on a Continuous Replenishment System. This in turn has

unshackled the field force to solely focus on secondary sales from the

stockists to retailers and market activation. It has also enabled RSs to

provide improved service to retail outlets. Simultaneously, HLL is

servicing the rural market, key urban outlets, and the modern trade as a

single concern.

HLL Way has also led to implementing best practices in customer

management and common norms and processes across the company.

Powered by the IT tools it has further improved customer service, while

ensuring superior availability and impactful visibility at retail points.

Indirect coverage

Under the Indirect Coverage (IDC) method, company vans were

replaced by vans belonging to Redistribution Stockists, which

serviced a select group of neighbouring markets.



Rural Marketing Final

Documents

cinema van operations

hindustan lever limited

personal care products

home care products

lifebuoy active orange

differentiated health perfume

project shakti programme

population strata number