PROJECT SHAKTI

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History of Unilever

Unilever is a BritishDutch multinational consumer goods company. Its products include foods, beverages, cleaning agents and personal care products. It is the world's third-largest consumer goods company measured by revenues (after Procter & Gamble and Nestl) and the world's largest maker of ice cream.

Unilever was founded on 1 January 1930 by Antonius Johannes Jurgens, Samuel van den Bergh and William Hulme Lever, 2nd Viscount Leverhulme.

Top Global Brands from Unilever

Unilever Brands in India

Unilever Brands in India

Market Power & Rapid Growth

Stats

License raj

Socialist government

Restrictions on FDIs

Stats about growth

Competitive Environment
Lower price segment- unorganized local players Higher price segment- Colgate, P&G, TOMCO, Godrej soaps Nirma vs Wheel

Liberalisation

Price war between HLL and P&G

Sales Organization

Strengths
Well established brands Local manufacturing capacity & SCM

Sales and Distribution

Sales Tree
CFA RS SKUs Regional offices- EWNS GSM RSM 4

ASM 6
SOs and TSIs TSI-6 to 10 stockists

Origins of Project Shakti

HLL strength of effective distribution to rural India is put into test Increase in competition

Challenges in Rural India

Poor reach of electronic media Low levels of literacy Low per capita consumption of goods

Strategies from New Ventures Division of HLL

SHGs - derived from Grameen Bank model of Bangladesh, 10 to 15 women in a village form a group and thrust is provided from various NGOs and multilateral agencies HLL entered into partnership with micro-credit enterprises to provide loans to SHGs. Thus not only creating business sense but also deep sense of social impact

Once the pool attains the threshold investment, they are given stocks of HLL to be sold

Project Shakti
Born in December 2000 in Nalgonda District of Andhra Pradesh Objective was: To reach untapped markets To develop its brands through local influencers
To provide sustainable livelihood opportunities for underprivileged rural women

Shakti Entrepreneur: Empowerment of Women

Partnership with SHGs known as MACTS

Who is a Shakti Entrepreneur?

Distribution system through Shakti Entrepreneur

Monthly earning : Rs. 700-1000

Project Shakti: Crossing the Chasm

Challenges of Project Shakti

RSP system

Hesitation from NGOs and governmental agencies due to its image as potentially unviable attempt

6 key tasks to be implemented

Arrange government permissions and secure the support of the district administration Identify and seal partnership with NGOs Interact with mainstream HLL sales force to identify market Locate SHGs Appoint right women as entrepreneurs

Ensure steady supply of products

Paradigm Shift

Limited product range

Identification of SKUs to focus in rural markets

High ratio of incomes from smaller SKUs when compared to larger SKUs

Development of Sachet revolution in the industry

Who is Vani and how does Vani function?

Local women trained on matters relating to personal and community health and hygiene to improve the quality of life of rural people and increase HLL revenue through sale of its products They covers the entire village by organizing interactive programmes at schools, SHG meetings, village get-togethers and communicating their message on health and hygiene

Targets of Vani and necessity of the ShaktiVani project

Recruit and train over 500 Vanis by covering 20,000 villages.

Shakti Vani is considered to be a cost-effective way of promoting HLL products in rural areas

What is i-shakti?

It is a rural community portal

Objective - It aims to empower rural community by making it possible for them to access information Implementation Through computers with dialogue interactive software developed by Unilever research team in London

How do people use i-shakti and where were the challenges?

It was an expensive program and the funds were not sufficient

Channel Approach
Appointed One stockist common to all businesses

Adopted a combined profit-centre approach

HLL sales force were ill-equipped to manage chains of retail stores

One ASM for one profit centre is not efficient to manage

Diamond Model
Modern trade- Self Service Stores & Retail Chains (10% of FMCG Market)

Profit Center based sales team

Direct Distribution in Rural Market (20% of HLLs business)

Rural Market size

Population Less than 200 200-499 500-999 1000-1999 2000-4999 5000-9999 10000 and above Total Number of Villages 114267 155123 159400 125758 69135 11618 3064 638365 % of Total 17.9 24.3 25 19.7 10.8 18 0.5 100

Market vs Potential Matrix

Low Business Potential Accessible Markets Indirect Coverage- 25% of Rural Business High Business Potential Direct Coverage- 40% of Rural Business

Inaccessible Markets

Space for Shakti to operate

Streamline- 35% of Rural Business

Streamline Model
Streamline initiative was launched in 1997 to target inaccessible markets by utilizing rural wholesale channel

Rural Distributors (RDs) were appointed who in turn appointed Star Sellers

Start sellers purchased stocks from RD and distribute in smaller villages by local means of transport

Challenges faced in Scaling Up of Project Shakti

Rising costs on human resources

Degree of Govt Cooperation

Availability of SHG groups Prosperity levels Cultural Issues Language differences Confidence and motivation levels of Shakti entreprenuers Formal training for Shakti Entreprenuers

Brand Managers to invest in the project

Creating Impact, Changing Lives

Not a niche initiative anymore Fine tuned the existing supply chain Helped HLL exit from non core businesses

In 2004 Shakti contributed 15% of HLLs turnover

Target to reach 100,000 villages by 2006 from existing 12,000 entrepreneurs across 12 states and 50,000 villages Target to account 15% to 20% of HLL revenues and reach 250 million additional consumers through 10,000 entrepreneurs by 2010

Promotion

Price

Attacking Through 4 Ps
Place

Product

Suggestions

Price: Pricing it effectively than competitors

Promotion: Using local celebrities. Local media, pamphlets

Suggestions

Place : Using Hub and Spoke model for effective distribution.

Product: Introduce current products which are not available as sachets in sachets.