My Hll Try

Introduction Hindustan Unilever Limited (HUL) is India’s largest fast moving consumer goods company, with leadership in Home & Personal Care Products and Foods & Beverages. HUL'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.13,718 crores. The mission that inspires HUL's over 15,000 employees is to "add vitality to life". With 35 Power Brands, HUL meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds 52.10% of the equity. A Fortune 500 transnational, Unilever sells Foods and Home and Personal Care brands in about 100 countries worldwide.

Hindustan Unilever Limited, 165/166, Backbay Reclamation Mumbai – 400 020 Tel : +91 – 22 – 39830000 Fax no. : +91 – 22 - 22026712 Ashok.K.Gupta, Executive Director (Legal) Email : [email protected] and Company Secretary Tel nos. : +91-22-39832567/ 39832358 / 39832557 Lovelock & Lewes, Chartered Accountants Statutory Auditors 252, Veer Savarkar Marg Dadar, Mumbai- 400 028 Crawford Bayley & Co. State Bank Building Solicitors N.G.N. Vaidya Marg Mumbai – 400 023 Karvy Computershare Private Limited Unit : HINDUSTAN UNILEVER LIMITED Plot No. 17 to 24, Vittalrao Nagar, Registrar and Share Transfer Madhapur, Hyderabad – 500 081. Agents Phone : +91- 40 23420818-823 Fax : +91- 40 23420814 Email : [email protected] Website : www.karvy.com

Subsidiary Companies

Unilever India Exports Limited Bon Limited Unilever Nepal Limited Pond’s Exports Limited Daverashola Estates Private Limited Jamnagar Properties Private Limited Shamnagar Estates Private Limited Brooke Bond Real Estates Private Limited Hindustan Unilever Field Services Private Limited Levers Associated Trust Limited Levindra Trust Limited Hindlever Trust Limited

Company’s Background Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company, touching the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and Foods & Beverages. They endow the company with a scale of combined volumes of about 4 million tonnes and sales of Rs.10,000 crores. HUL is also one of the country's largest exporters; it has been recognized as a Golden Super Star Trading House by the Government of India. The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to "add vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life. It is a mission HUL shares with its parent company, Unilever, which holds 51.55% of the equity. The rest of the shareholding is distributed among 380,000 individual shareholders and financial institutions. HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's – are household names across the country and span many categories soaps, detergents, personal products, tea, coffee, branded staples, ice cream and culinary products. They are manufactured over 40 factories across India. The operations involve over 2,000 suppliers and associates. HUL's distribution network comprising about 4,000 redistribution stockists, covering 6.3 million retail outlets reaching the entire urban population, and about 250 million rural consumers. HUL has traditionally been a company, which incorporates latest technology in all its operations. The Hindustan Unilever Research Centre (HLRC) was set up in 1958, and

now has facilities in Mumbai and Bangalore. HLRC and the Global Technology Centers in India have over 200 highly qualified scientists and technologists, many with postdoctoral experience acquired in the US and Europe. HUL believes that an organization’s worth is also in the service it renders to the community. HUL is focusing on health & hygiene education, women empowerment, and water management. It is also involved in education and rehabilitation of special or underprivileged children, care for the destitute and HIV-positive, and rural development. HUL has also responded in case of national calamities / adversities and contributes through various welfare measures, most recent being the village built by HUL in earthquake affected Gujarat, and relief & rehabilitation after the Tsunami caused devastation in South India. In 2001, the company embarked on an ambitious programme, Shakti. Through Shakti, HUL is creating micro-enterprise opportunities for rural women, thereby improving their livelihood and the standard of living in rural communities. Shakti also includes health and hygiene education through the Shakti Vani Programme, and creating access to relevant information through the iShakti community portal. The program now covers 15 states in India and has over 31,000 women entrepreneurs in its fold, reaching out to 100,000 villages and directly reaching to 150 million rural consumers. By the end of 2010, Shakti aims to have 100,000 Shakti entrepreneurs covering 500,000 villages, touching the lives of over 600 million people. HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme endeavors to induce adoption of hygienic practices among rural Indians and aims to bring down the incidence of diarrhea. It has already touched 70 million people in approximately 15000 villages of 8 states. The vision is to make a billion Indians feel safe and secure. If Hindustan Unilever straddles the Indian corporate world, it is because of being singleminded in identifying itself with Indian aspirations and needs in every walk of life.

Mission Unilever's mission is to add Vitality to life. We meet everyday needs for nutrition, hygiene, and personal care with brands that help people feel good, look good and get more out of life.

The Crisis of Declining Markets

Through the nineties, the FMCG markets grew at almost 15% per annum in value. Suddenly, in 2000, FMCG market growth stalled and then declined for the next four years. It is important to understand why this happened. The rapid opening up of the economy resulted in many new avenues of expenditure for the consumer’s growing income. A sharp drop in interest rates from 18% to 8% led to explosive demand for consumer durables like white goods, two-wheelers and automobiles. After all, one could drive out of a car showroom in a Maruti 800 with a down payment of only Rs. 2000. The home ownership market grew exponentially as the average age of a home loan borrower dropped from 50 in 1999 to 30 in 2004. Mobile phone ownership and usage exploded due to its amazing lifestyle and convenience benefits as well as lower prices. Entertainment, Leisure and Travel sectors also boomed. The lure of new avenues of expenditure in products and services led to consumers restricting their expanse on FMCG. It is not that they bathed less often or brushed their teeth less often or indeed washed their clothes less often. But they did downtrade to lower priced substitutes from higher quality brands. For example, a consumer buying six tablets of Lux in a month went to buying three of Lux and three cheaper brands. Or a consumer buying Surf Excel for her clothes mixed it with a cheaper powder. As a result of this shift in spending patterns, the FMCG market declined in value in the last four years creating a major challenge for growth.

The new Hindustan Lever: Focused on FMCG

In 2000, 75% of our sales came from FMCG businesses. The rest came from several non-FMCG businesses which were not profitable, and did not offer prospects for long-term leadership. Besides, they were a drain on the core FMCG business, both in terms of resource and focus. They decided to disengage from all non-FMCG or commodity businesses. In all, we have divested and discontinued 15 businesses including Animal Feeds, Speciality Chemicals, Nickel Catalyst, Adhesives, Thermometers, Seeds, Mushrooms etc. with sales of Rs.1,750 crores as in 1999. Today they are a focused on FMCG company with our branded business accounting for over 90% of sales, consisting of 35 brands across 20 categories. These will be their main engines of growth, with higher levels of resource concentration, be it technology, people talent or media spend.

FMCG still offers enormous potential As the largest FMCG player it was up to them to reverse the downtrading to realize its true growth potential. They could achieve this by raising the bar and becoming world class in what their brands offered and how they worked. Nothing less would do. Penetration levels in several of the categories and consumption levels in all of the categories islow by any comparison. Across the world, they are seeing a strong correlation between income levels and the size of FMCG markets. Over the next 10 years, per capita

income in India is likely to touch China’s current levels. At those levels, the FMCG market will be over Rs.100,000 crores from a current value of Rs.40,000 crores. This is an opportunity that they have to seize.

Better Value The first step was to ensure that they offer world class quality and real differentiation backed by technology

to give them the

advantage over low priced competition. They have invested over Rs.400 crores, or 5% of sales, in the last three years to upgrade the brands. In several cases they reduced prices to make the brands more affordable. Better quality and more affordable prices have increased the value to the consumer. They have also launched several low unit size and price packs for single use to make the brands more accessible to all income groups. For example, they are the first to introduce a branded toothpaste in a tube at Rs.5 and a branded quality shampoo in a bottle at Rs.5.

Bigger Role in Consumers’ Lives Perhaps the most significant change has been to move the brands beyond merely making functional claims to playing a bigger and deeper role in the lives of consumers. They had to move from selling a soap or a detergent to something far more important and central

to the consumer’s life. How often have we heard someone say, “A soap is a soap is a soap!” Or indeed, “All detergents clean clothes as well”.

In the case of Lifebuoy, it was only when they associated it with the promise of health and protection against disease that it claimed a larger space in the consumer’s mind. It moved from being a mere soap to a health essential. Today Lifebuoy, their oldest brand, has grown at over 15% for the last three years. Similarly, in the laundry market, Surf Excel went well beyond the benefit of ‘great clean’ by saving two buckets of water with every wash. Imagine the importance of that benefit to consumers in cities, who often get running water for only a couple of hours a day. Surf Excel is one of their fastest growing brands today. Both Lifebuoy and Surf Excel have succeeded because they are relevant to two key concerns of the Indian housewife: family health and the scarcity of water. In addition to the growing consciousness of health, consumers today are looking for ways to look good and feel good so that they can get much more out of life. In short, consumers are seeking Vitality in their lives. Their portfolio of 35 power brands is uniquely positioned to offer nutrition, hygiene and personal care benefits and thereby deliver Vitality.

Technology, the Key Differentiator

Their brands and sound understanding of the local consumer are supported by a world class Research and Development capability. They have over 200 of the brightest scientists and technologists based in India. Their recent reorganization leverages the talent pool from across 16 global technology centres, of which four are in India. In all, they have over 4,000 high quality minds across Unilever working relentlessly to provide new benefits that make a real difference to the consumers.

Winning with Customers Hindustan Lever has historically had a strong bond with its customers. They have strengthened this and reinvented the way they manage their distribution channels and their customers. The sales structure has been transformed to leverage scale and build expertise in servicing Modern Trade and Rural Markets. They have also de-layered their sales force to improve the response times and service levels. Their customers are serviced on continuous replenishment. This is possible because of IT connectivity across the extended supply chain of about 2,000 suppliers, 80 factories and 7,000 stockists. They have also combined backend processes into a common Shared Service infrastructure, which supports the units across the country. All these initiatives together have enhanced operational efficiencies, improved the service to the customers and have brought us closer to the marketplace.

Our Acorns: Investing in our Future

In the pursuit of growth, they have also begun to nurture some acorns for the future. These are both new businesses and new ways of engaging with consumers. Their entry into Water Purifiers, through Pureit, shows great promise. Pureit delivers 100% protection against all water-borne diseases. It provides water which is as safe as boiled water, without needing electricity or continuous tap water supply. At 17 paise per litre, it is extremely affordable for the common man. They have launched it in Tamil Nadu and are fine-tuning all aspects of the business system before a phased national launch. In urban India, Hindustan Lever Network (HLN) is their direct selling initiative selling a special range of products. It already reaches 1,400 towns with over 3 lakh consultants. Besides reach, HLN enables direct interaction with consumers and customises solutions for them to give them a complete brand experience.

Our People & Organisation They have restructured the company, integrating eight Profit Centres into two Divisions – Home and Personal Care (HPC) and Foods. The result is a simpler and leaner organisation, less hierarchical with fewer levels and greater empowerment. This has eliminated complexity and speeded up decision making. Today the company is far more youthful in attitude and spirit. There is greater openness and transparency.

The Transformation: Investment in the Future To ensure that Hindustan Lever remains competitive in the longterm, they have made significant investments in product quality, pricing and marketing. As mentioned earlier, the investment in product quality alone has been in excess of Rs. 400 crores, or 5% of our sales. In addition there has been the cost of defending their market position. Recently an international competitor attacked their laundry business led by a price reduction of as much as 50%. They acted with speed and determination leveraging all their past experience in India and internationally. They have been able to fully protect their market leadership and share, albeit sacrificing short-term profit. They made this necessary trade-off as market share is the best means of sustaining future profit. Over time, their stronger market positions will surely lead to greater long-term profit. Despite these significant investments to strengthen the long-term competitiveness and the costs of defending the strong market position, they still remain one of the most profitable companies in the country.

Company profile

R&D

REVIEW OF BUSINESSES SOAPS & DETERGENTS Personal Wash: •

Premium segment grew by15.5%; while overall market share recovered in December quarter. The company launched Breeze 2-in-1. Overall value growth was impacted by flat input prices leading to stable consumer prices and aggressive promotional activities, particularly in low price segment to address competitive issues. Lifebuoy needs to be rejuvenated.

Fabric Wash: •

This business saw an overall growth of 7.3%. There is healthy growth in premium brands. Low price powder and bar volumes grew by 2%. Dish Wash

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Overall growth is healthy at 22%. Vim Bar has been relaunched. Wheel Jug Mug has been launched.

PERSONAL PRODUCTS Oral Care: •

Market share held in Toothpaste; gained in Toothbrush. Sales value declined by 3% due to overall downtrading by competition as well as promotional activities to counter competition. Hair care:

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Shampoo sales was up by 11%. Shampoo market share had declined by 2%. Clinic All Clear was relaunched along with packaging innovations. Hair oil sales had risen by 32%. Profitability had improved through supply chain. Skin & Others:

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Skin sales were flat. Market share declined marginally by 90 basis points. Pressure from low price competition as well as new entrants in fairness segment is being addressed through focussed plans. Colour Cosmetics sales grows by 20%.

BEVERAGES •

Sales were up by 5% despite depressed commodity prices, reversing decline of last 2 years. Premium brands grew by 15%. Lipton Ice Tea has been test marketed. The response is encouraging. Red label has been relaunched. Strategy to exit unviable discount segment is being put in place which has been triggered by unrealistic excise demands. Coffee registered a 7% volume growth. However lower commodity prices restricted value growth to 3%.

ICE CREAMS

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Overall sales were flat due to product rationalisation to improve viability. Launch of softies and focus on Parlours delivered a strong volume growth of 10.2% in the second half. Continuing supply chain initiatives improved gross margins and cash loss was reduced.

BRANDED STAPLE FOODS •

Growth momentum continues. The segment grew by 26% due to innovation and focussed marketing activities. Maintained leadership position in the Atta market. Salt has gained a 2% market share. Low sodium granulated salt was launched.

CULINARY PRODUCTS •

Category returns to growth path led by Tomato which grew by 20% through relaunch of Ketchup and introduction of new variants: Tangy Ketchup and Chili Sauce. Jams and squashes relaunched on fortification platform.

OILS & FATS •

Dalda Activ innovation receives good response; extensions per plan. Volumes grew by 21% and value 8% in the second half which offset the volume decline in the first half. Commodity prices continue to fall

Why Different Strategies? •

Rural markets, as part of any economy, have untapped potential. There are several difficulties

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confronting the effort to fully explore rural markets. The concept of rural markets in India is still in

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evolving shape, and the sector poses a variety of challenges. Distribution costs and nonavailability

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of retail outlets are major problems faced by the marketers. The success of a brand in

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successful, have failed miserably. This is because most firms try to extend marketing plans that

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they use in urban areas to the rural markets. The unique consumption patterns, tastes, and needs

the Indian rural market is as unpredictable as rain. Many brands, which should have been

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of the rural consumers should be analyzed at the product planning stage so that they match the

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needs of the rural people.

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Therefore, marketers need to understand the social dynamics and attitude variations within each

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village though nationally it follows a consistent pattern. The main problems in rural marketing are: Understanding the Rural Consumer Poor Infrastructure Physical Distribution Channel Management Promotion and Marketing Communication Dynamics of rural markets differ from other market types, and similarly, rural marketing strategies are also significantly different from the marketing strategies aimed at an urban or industrial

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Branding strategy Their main challenge was to reverse the downtrading in the categories and re-establish the relevance of their brands in the mind of

the

consumer.

In

2000,

they

had

110

brands,

many

undifferentiated and lacking scale. They chose to focus on 35 power brands covering all consumer appeal and price segments. They are already seeing the benefits. Six brands – Brooke Bond, Lifebuoy, Lux, Fair & Lovely, Rin and Wheel – have emerged as mega brands in the last five years, each with sales of more than Rs.500 crores.

Marketing Strategy •

Marketers need to understand the psyche of the rural consumers and then act accordingly. Rural

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marketing involves more intensive personal selling efforts compared to urban marketing. Firms should refrain from designing goods for the urban markets and subsequently pushing them in the

•

•

rural areas. To effectively tap the rural market, a brand must associate it with the same things the

•

rural folks do. This can be done by utilizing the various rural folk media to reach them in their own language and in large numbers so that the brand can be associated with the myriad rituals,

•

•

celebrations, festivals, "melas", and other activities where they assemble.

Distribution / place Strategy • •

One of the ways could be using company delivery van which can serve two purposes - it can take the products to the customers in every nook and corner of the market, and it also enables the firm

•

to establish direct contact with them, and thereby facilitate sales promotion.

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However, only the bigwigs can adopt this channel. The companies with relatively fewer resources can go in for syndicated distribution where a tie-up between non-competitive marketers can be

•

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established to facilitate distribution. Annual "melas" organized are quite popular and provide a

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very good platform for distribution because people visit them to make several purchases.

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According to the Indian Market Research Bureau, around 8000 such melas are held in rural India

•

every year. Rural markets have the practice of fixing specific days in a week as Market Days

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(often called "Haats') when exchange of goods and services are carried out. This is another

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potential low cost distribution channel available to the marketers. Also, every region consisting of

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several villages is generally served by one satellite town (termed as "Mandis" or Agrimarkets)

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where people prefer to go to buy their durable commodities. If marketing managers use these

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feeder towns, they will easily be able to cover a large section of the rural population.

Promotional Strategy •

Firms must be very careful in choosing the vehicle to be used for communication. Only 16% of

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the rural population has access to a vernacular newspaper. So, the audio visuals must be

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planned to convey a right message to the rural folk. The rich, traditional media forms like folk dances, puppet shows, etc., with which the rural consumers are familiar and comfortable, can be

•

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used for high impact product campaigns

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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 (PRODUCT STRATEGY) I would continue with the existing portfolio of the products and would concentrate on coming with new fragrances on different soaps than launching new soaps. I would position Dove and Lux International soap very urban rich women who are extra conscious for their complexion. Pears, Lux International would be positioned for the urban and rural rich. For the consuming urban class, Liril, Rexona, Pears and Lifebouy International would be positioned. I would also come up with 40gm packaging for different products. I will also be thinking of extending popular brands of cosmetics in the toilet soap segment by that decision would be based on the popularity and acceptance of that particular brand (Brand Extension).

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."

PROMOTION Promotion: For promotion, apart from continuing the existing strategy of concentrating on T.V. channels, I would try to focus on the promotional campaign in rural sector. I would also concentrate on promoting through radio and sponsoring the programs e.g. ‘Krishi Darshan' and ‘Aap ka Swasthaya' programs that have greater number of audience. The advertising for them would have a pastoral and cultural looks. I would chalk out the rural promotion scheme for those areas where the cable T.V. has not reached. Under this scheme I would try to include ‘Gram Panchayat', ‘Swasthaya Parishad' and other local bodies by offering knowledge for using good and anti-germ products.

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. " Thecompany 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 I would be try to customize the packaging of various products on the basis of price points. e.g. I will come up with the pricing of Rs 5, Rs 10 and Rs 15 for different products. I would try to experiment it with the products positioned for consuming class.

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 pricecutting 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 As the marketing channels of the company are already established I would try to increase the penetration in the rural sector to the extreme remote areas which are not touched till now. I would try to reduce the delivery time of the products by choosing and increasing the strategic locations of warehouses. I would also track the distribution path of the wholesalers in small cities through marketing team and would establish a platform or team at a zonal level for all the wholesalers and would try to take their feedback on the market developments.

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.

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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 Population

627000 698million

Outlets

3768

Urban India Population Strata Number of Towns % of Population >1 Lakh 50000 - 1 Lakh 20000 – 50000 10 - 20000 5 – 10000 > 5000

309 64.9 358 11 968 13.3 183 7.9 757 2.6 192 0.3

Rural India

Population Strata Number of Towns % of Population

> 10,000 5 - 10,000 2 - 5,000 1 - 2,000 500 - 1,000 < 500

1,831 0.3 7,145 1.3 46,754 8.4 94,658 16.9 136,232 24.7 340,380 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.

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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.

SWOT ANALYSIS Opportunities

Infrastructure is improving rapidly In 50 years only, 40% villages have been connected by road, in next 10 years another 30% would be connected. More than 90% villages are electrified, though only 44% rural homes have electric connections. Rural telephone density has gone up by 300% in the last 10 years; every 1000+ pop is connected by STD. Social indicators have improved a lot between 1981 and 2001 Number of "pucca" houses doubled from 22% to 41% and "kuccha" houses halved (41% to 23%). Percentage of BPL families declined from 46% to 27%. Rural literacy level improved from 36% to 59%. Low penetration rates in rural areas, so there are many marketing opportunities

Scope & opportunities: The basic scope of this novel initiative will be the mutual

benefits of the rural entrepreneurs and industries. The entrepreneurs – primary beneficiaries, SHGs – bridge with the community, participating companies/industries and rural consumers have befitted through a robust commercial relationship. These models of marketing linkages demonstrate a large corporation which can play a major role in reorganizing markets and increasing the efficiency of a rural product generation system. While doing so it will benefit farmers and rural communities as well as shareholders. Moreover, the key role of information technology—provided and maintained by the industry/company for building linkages, and used by local farmers—brings about transparency, increased access to information, and rural transformation. Besides, this strategy of market linkage, addresses the challenges faced by rural entrepreneurs due to institution voids, numerous intermediaries and infrastructure bottlenecks. Moreover, the prime scope of this model is the creation of opportunities for the rural entrepreneurs for product differentiation and innovation by offering them choices. Because of this sustainable market linkages, rural producers can participate in the benefits of globalization and will also develop their capacity to maintain global quality standard. Nonetheless, it creates new stakeholders for the industry sector. And subsequently, they become part of the firms’ core businesses. The involvement of the private /industry sector at the rural product and market development can also provide opportunities for the development of new services and values to the customers, which will find application in the developed markets. It will be worth mentioning that building a sustainable market linkage through industry’s intervention will also empower the rural mass (producers,

farmers & entrepreneurs) to cope with socio-economic problems in the rural society and will ensure economic self –reliance. Challenges: There are significant challenges to the entire process the most important being the capacity building of the rural entrepreneurs. For decades, the entrepreneurs associated with very conventional/traditional knowledge of business, humiliation with government, so they are likely to look at these initiatives with skepticism. Only consistent performance can convince the skeptics. Therefore, the industries must play a catalytic role to cope with this challenge and should also train the entrepreneurs to develop their managerial and IT skills. On the other hand, the products of the existing and popular brand also stand as threat to the rural products. These global giants (brand) may try to suppress the rural products in the markets with its communication hype. Therefore, developing alternative and additional market linkages for these products is an absolute necessity. Moreover, the low volumes of rural products, high operating cots, high attrition, and absence of local know how and relationships may also create problem in the process. Henceforth, it is essential to make a way out to cope with these odds.

Durables Urban Rural Total (% of Rural HH)