NATIONAL INSTITUTE OF FASHION TECHNOLOGY, KOLKATA

Rural Marketing Initiatives by Hindustan UniLever Ltd.

MINOR PROJECT SYNOPSIS

Masters of Fashion Management

Submitted by:

Shrestha Dey, Roll no: 11

FMS dept., NIFT Kolkata

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Under the guidance of:

Ms. Ritu Malholtra,

FMS dept., NIFT, Kolkata

Contents:

Introduction Research Methodology Research Objective Proposed Chapters Scope of the study Limitations of the study Literature Review Bibliography

Introduction

Gone are the days when a rural consumer went to a nearby city to buy ‘branded products and services’. Trends indicate that the rural markets are coming up in a big way and growing twice as fast as the urban, witnessing a rise in sales of hitherto typical urban kitchen gadgets such as refrigerators, mixer-grinders and pressure cookers. According to a 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.

  The absolute size of rural India is expected to be double that of urban India. The study on ownership of goods indicates the same trend. It segments durables under three groups - (1) necessary products - Transistors, wristwatch and bicycle, (2) Emerging products – Black & White TV and cassette recorder, (3) Lifestyle products – Color TV and refrigerators. Marketers have to depend on rural India for the first two categories for growth and size. Even in lifestyle products, rural India will be significant over next five years. Apart from increasing the geographical width of their product distribution, the focus of corporates should be on the introduction of brands and develop strategies specific to rural consumers.

Rural Marketing is defined as any marketing activity in which one dominant participant is from a rural area. This implies that rural marketing consists of marketing of inputs (products or services) to the rural as well as marketing of outputs from the rural markets to other geographical areas.

Marketing strategies that worked for urban markets do not necessarily work for the rural ones. There are 7 differentiators identified in why the rural market is different:

1. Intra community influences are relatively more important than inter-community ones. Word-of-mouth in close knit communities is more powerful.

2. Scarcity of media bandwidth. Rural individual's access to media channels is limited and in the case of broadband the comparable upload and download speed may be slower. Online shopping is seen as a solution by many but will be dependent on broadband speed.[1]

3. Slow to adopt brands. Slow to give them up. Rural consumers will be slower to pick up trends or brands but will remain loyal when accepted.

4. Expenses are yearlong; income is seasonal. Many rural areas rely on seasonal tourism peaks when income will be high and to a lesser extent agricultural incomes from seasonal crops. This means there will be more disposable income at certain times with rural businesses and employees.

5. Information hungry; but entertainment starved. Isolation from entertainment centres has led to companies trying edutainment to get their message across.

6. Higher receptivity to experience advertising. Retail outlets in rural areas have many demonstration areas along with markets for tasting.

7. Commercially profitable; and socially acceptable. Brands with demonstrable local, rural, environmental and/or social credibility stand a better chance.

About the company:

Hindustan Unilever Limited (HUL) is India's largest fast-moving consumer goods company based in Mumbai, Maharashtra. It is owned by the British-Dutch company Unilever which controls 52% majority stake in HUL.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 16,500 employees and contributes to indirect employment of over 65,000 people. The company was renamed in June 2007 as “Hindustan Unilever Limited”.

Lever Brothers started its actual operations in India in the summer of 1888, when crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers" were shipped to the Kolkata harbor and it began an era of marketing branded Fast Moving Consumer Goods (FMCG).

Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products.

Rural Initiatives by HUL:

Project Shakti Shaktiman Khushiyon ki Doli Lifebuoy Swasthya Chetna

Project Shakti : In order to further strengthen its distribution in the rural areas and to empower the local women, HUL launched a project Shakti in 2000 in a district in Andhra Pradesh. The idea behind this project was to create women entrepreneurs and

provide them with micro-credit and training in enterprise management which in turn would alleviate poverty.

Shaktiman: In 2010, HUL rolled out the Shaktiman initiative through Project Shakti. Through the Shaktimaan initiative, men in the Shakti Amma families distribute HUL products to villages adjoining the respective Shakti village.

Khushiyon ki Doli: The company launched a multi-brand rural marketing initiative called Khushiyon Ki Doli, in 2010 in three states – Uttar Pradesh, Andhra Pradesh and Maharashtra. The module follows a three-step process, starting with awareness, moving on to consumer engagement and finally retail contact. Through this initiative more than 10 million consumers were contacted directly in more than 28,000 villages across these three states. Through this initiative, the company also reached out to 170,000 retailers in these villages. Various personal care and home care brands of HUL have participated in this initiative including: Wheel, Surf Excel, FAL, Sunsilk, Vim, Lifebuoy and Closeup.

Lifebuoy Swasthya Chetna: Lifebuoy is Unilever's biggest brand in India and the country's most popular soap.The Lifebuoy Swasthya Chetna programme was initiated in 2002 as a rural health and hygiene initiative in India. In India, over 600,000 children under the age of five die annually from diarrhoea. Studies have shown that almost half these deaths could have been prevented by simply washing hands with soap. In partnership with local government bodies, the Lifebuoy Swasthya Chetna programme is designed to spread awareness about the importance of washing hands with soap. It also promotes general hygiene in rural areas that are difficult to reach through usual marketing campaigns such as television, press or in-store advertising and promotions.

Research Methodology:

The information for this report is gathered from Books, Internet, Journals, Magazines Reports

and Case Studies.

Research Design – Exploratory Research

Type and Source of data - Secondary data

Nature of data – Qualitative

Research objective:

Primary objective:

To assess how the various rural marketing initiatives helped the growth of HUL in

the rural market.

Secondary Objectives:

Future opportunities of HUL in rural marketing in comparison to its competitors.

Proposed Chapters:

1. Introduction

2. Product lines of HUL

3. SWOT Analysis

4. Competitor’s Analysis

5. Performance Analysis

6. Future Opportunities

7. Future Projects in Rural marketing of HUL

8. Conclusion

9. Bibliography

Scope of the Study:

The study will help us in assessing HUL’s success rate in the rural marketing

scenario.

The study will be helpful and provide with useful and latest information regarding

rural marketing strategies by HUL to all those interested to study the matter in future.

It will also provide with solutions to the threats and weaknesses that HUL faces in

this field.

Limitations:

Time: Time is a constraint.

Money:

Literature Review:

"There's incredible potential in rural markets. That's where the growth will come from." ~ Sharat Dhall, Hindustan Lever's director of new ventures and marketing services

Article Source: http://EzineArticles.com/1245833

According to Sundaram, "The activity has been received very well. We have seen an increase in trials, sales and distribution for all the brands participating in this activity."

Article source: http://www.campaignindia.in/Article/230079,all-about-khushiyon-ki-doli.aspx

"We expect the rural contribution to increase from around one-third to about 50% in the next 4-5 years," said Anshul Asawa, vice-president, marketing operations, home & personal care and foods ( South Asia), HUL.

Article source: http://timesofindia.indiatimes.com/business/india-business/Rural-market-

share-to-rise-in-HUL-topline/articleshow/7414951.cms

“HUL works on volumes and their competition is regional and national”, HUL said Shirish Pardeshi, industry specialist, institutional equities, Anand Rathi Financial Services Ltd. “Smaller batch sizes and flexibility in production help it to respond faster to volatility and competition.”

Article source: http://www.livemint.com/2010/07/12233422/HUL-aims-to-react-faster-to-ma.html

Bibliography:

JWT, 2009

accessh.org

www. lifebuoy .com

www.globalhandwashingday.org

www. hul .co.in

http://www.thehindubusinessline.com/markets/stock-markets/article1568490.ece

http://en.wikipedia.org

http://www.managementparadise.com/forums/marketing-management/203150-factors-

contributing-growth-rural-marketing. html