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Product mix of hll
1.
2. Wall painting that are used to capture the attention of the audience and is an economic medium. It uses wall paintings for its products as Wheel, Lifebuoy etc. The wall painting of Lifebuoy is displayed.
3. Cinema theatre’s and vans as rural consumers fascinated by cinema and it has great impact on them and a wider reach. The cinema vans show popular movies, interspersed with products advertisements
4. Puppet shows where the puppets are used to communicate the ideas and values to rural consumer and is an inexpensive medium.
5. Folk theatre is used for informing and educating people about some products through Tamasha’s, skits and plays.
6. Weekly markets, fairs and festivals are parts and parcel of rural life. They give an opportunity to address consumers, spread over many tiny hamlets, at one location.
7. Demonstrations are done about products at various occasions which are used to demonstrate product benefits and also sell such products. Such demonstrations have played significant role in creating, for example, the detergents market in rural India. In recent times, such demonstrations are being deployed by HUL to illustrate how visible clean is not hygienic clean, and how using soap is essential to prevent easily avoidable infections. Communication through fairs and festivals are backed by direct consumer contact. For Eg: in 1998-99, Hindustan Lever implemented a major direct consumer contact, called Project Bharat, which covered 2.2 crore homes. Each home was given a box, at a special price of Rs.15, comprising a low unit price pack of shampoo, talcum powder, toothpaste and skin cream, along with educational leaflets and audio-visual demonstrations. The project has helped eliminate barriers to trial, and has strengthened salience of both particular categories and brands. In 2002, Hindustan Lever has launched a similar large-scale direct contact, called Lifebuoy Swasthya Chetana, which already covers 70 million people in 18,000 villages of 8 states. The project is intended at generating awareness about health and hygiene practices and specifically how a simple habit of washing hands is essential to maintaining good health. The initiative involves interaction with students and senior citizens who act as change agents or opinion leaders that influence rural consumer. The programme has as of now covered about 15000 villages in 8 states - Uttar Pradesh, Bihar, Jharkhand, West Bengal, Orissa, Madhya Pradesh, Chattisgarh and Maharashtra; it has already touched about 70 million people, imparting hygiene education to over 25 million children.Distribution strategies of HUL.<br />In rural India particularly, availability determines volumes and market share, because the consumer usually purchases what is available at the outlet, influenced very largely by the retailer.<br />Hindustan Lever Limited has a distribution network which is one of their key strengths that helps them reach their products across the length and breadth of this vast country.<br />To meet the ever-changing needs of the consumer, HUL have set up a distribution network that ensures availability of all its products, in all outlets, at all times. This includes, maintaining favorable trade relations, providing innovative incentives to retailers and organizing demand generation activities among a host of other things.<br />Therefore, over the decades, Hindustan Lever has progressively strengthened its distribution reach in rural India, which today has about 33 lakh outlets. Direct rural distribution in Hindustan Lever began with the coverage of villages adjacent to small towns. The company's stockiest in these towns were made to use their infrastructure to distribute products to outlets in these villages. But this distribution mode could only be extended to villages connected with motor able roads, and it could cover about 25% of the rural population by 1995.<br />The evolution of HUL's Distribution Network:-<br />The first phase of the HUL distribution network had wholesalers placing bulk orders directly with the company. Large retailers also placed direct orders, which comprised almost 30 per cent of the total orders collected. The company salesman grouped all these orders and placed intent with the Head Office. Goods were sent to these markets, with the company salesman as the consignee. The salesman then collected and distributed the products to the respective wholesalers, against cash payment, and the money was remitted to the company.<br />The focus of the second phase, which spanned the decades of the 40s, was to provide desired products and quality service to the company's customers. In order to achieve this, one wholesaler in each market was appointed as a quot;
Registered Wholesaler,quot;
a stock point for the company's products in that market. The company salesman still covered the market,<br />canvassing for orders from the rest of the trade. He would then distribute stocks from the Registered Wholesaler through distribution units maintained by the company. The Registered Wholesaler system, therefore, increased the distribution reach of the company to a larger number of customers.<br />The highlight of the third phase was the concept of quot;
Redistribution Stockiestquot;
(RS) who replaced the RWs. The RS was required to provide the distribution units to the company salesman. The RS financed his stocks and provided warehousing facilities to store them. The RS also undertook demand stimulation activities on behalf of the company.<br />The second characteristic of this period we realized that the RS would be able to provide customer service only if he was serviced well. This knowledge led to the establishment of the quot;
Company Depotsquot;
system. This system helped in transshipment, bulk breaking, and as a stock point to minimize stock-outs at the RS level.<br />In the recent past, a significant change has been the replacement of the Company Depot by a system of third party Carrying and Forwarding Agents (C&FAs). The C&FAs act as buffer stock-points to ensure that stock-outs did not take place. The C&FA system has also resulted in cost savings in terms of direct transportation and reduced time lag in delivery. The most important benefit has been improved customer service to the RS. The role performed by the Redistribution Stockiest has also undergone changes over the years. Financing stocks, providing manpower, providing service to retailers, implementing promotional activities, extending indirect coverage, reporting sales and stock data, screening for transit damages are some of the functions performed by the RS today. HUL has grown manifold over the years. In the process, the number of factories and the number of SKUs too have increased. In order to rationalize the logistics and planning task, an innovative step has been the formation of the Mother Depot and Just in Time System (MD-JIT). Certain C&FAs were selected across the country to act as mother depots. Each of them has a minimum number of JIT depots attached for stock requirements. All brands and packs required for the set of markets which the MD and JITs service in a given area are sent to the mother depot by all manufacturing units. The JITs draw their requirements from the MD on a weekly or bi-weekly basis. At present, HUL's products, manufactured across the country, are distributed through a network of about 7,000 redistribution stockiest covering about one million retail outlets. The distribution network directly covers the entire rural population.<br />In addition to the ongoing commitment to the traditional grocery trade, HUL is building a special relationship with the small but fast emerging modern trade. Our scale enables us to provide superior customer service including daily servicing, improving their range availability whilst reducing inventories. We are using the opportunity of interfacing more directly with our consumers in this retail environment through specially designed communication and promotions. This is building traffic into the stores while yielding high growth for our business. An IT-powered system has been implemented to supply stocks to redistribution stockiest on a continuous replenishment basis. The objective is to catalyse HUL’s growth by ensuring that the right product is available at the right place in right quantities, in the most cost-effective manner. For this, stockiest have been connected with the company through an Internet-based network, called RS Net, for online interaction on orders, dispatches, information sharing and monitoring. RS Net covers about 80% of the company's turnover. Today, the sales system gets to know every day what HUL stockiest have sold to almost a million outlets across the country. RS Net is part of Project Leap, HUL's end-to-end supply chain, which also includes a back-end system connecting suppliers, all company sites and stretching right up to stockiest. RS Net has come as a force multiplier for HUL Way, the company's action-plan tomaximise the number of outlets reached and to achieve leadership in every outlet, by unshackling the field force to solely focus on secondary sales from the stockiest to retailers and market activation. HUL 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. HUL, has been at the forefront of experimenting with innovative methods to reach the rural consumer.<br />1) Indirect coverage<br />Under the Indirect Coverage (IDC) method, company vans were replaced by vansbelonging to Redistribution Stockiest, which serviced a select group of neighboringmarkets.<br />2) Operation Harvest<br />The reach of conventional media and, therefore, awareness of different products in ruralmarkets is weak. It was also not always feasible for the Redistribution Stockiest to cover allthese markets due to high costs involved. Yet, these markets are important sincegrowth opportunities are high. Operation Harvest endeavored 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.<br />3) Cinema van operations<br />These are typically funded by the Redistribution Stockiest. Cinema Van Operations have films and audio cassettes with song and dance sequences from popular films, also comprising advertisements of HUL products.<br />4) Single Distribution Channel<br />For rural India, HUL has established a single distribution channel by consolidatingcategories. In a significant move, with long-term benefits, HUL has mounted an initiative,Project Streamline, to further increase its rural reach with the help of rural sub-stockiest. Ithas already appointed 6000 such sub-stockiest. As a result, the distribution network directlycovers about 50,000 villages, reaching about 250 million consumers.<br />Project Shakti<br />Hindustan Lever is implementing Project Shakti since 2001, whereby SHGs are being offered the option of distributing relevant products of the company as a sustainable income-generating activity. The model hinges on a powerful win-win relationship; the SHG engages in an activity which brings sustainable income, while Hindustan Lever gets an interface to interact and transact with the rural consumer.<br />Distribution acquired a further edge with Project Shakti, HUL's partnership with Self Help Groups of rural women. The project, started in 2001, already covers over 5000villages 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, there by touching about 100 million consumers. The SHGs have chosen to adopt distribution of HUL's products as a business venture, armed with training from HUL 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.1000per 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 HUL, 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 HUL 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. Project Shakti is now operational in 12 states across the country. Currently over 13,500 women entrepreneurs cover around 60,000 villages earning an average income of Rs 700 – 1000 per month doubling their household income. By the end of 2005 there would be around 20,000 Shakti entrepreneurs reaching out to around 100,000 villages.<br />The Project Shakti now contributes a little more than Rs 100 crore to the Lever top line, and is yet to break even. By the next year-end, HUL believes Shakti's contribution could double and the project could achieve cash break-even.<br />Project Shakti Initiative in rural markets.<br />ITC<br />Product strategy<br />ITC had launched nearly all the products range off Non tobacco Products; they are very aggressive in their distribution of such products. The existing network of ITC’s Cigarettes distribution is being used extensively for the sales all products of ITC Food division. They are trying to capitalized the market by associating the products with the ITC brand.<br />ITC in FMCG<br />Cigarettes<br />ITC is the market leader in cigarettes in India. With its wide range of invaluable brands, it has a leadership position in every segment of the market. It's highly popular portfolio of brands includes Insignia, India Kings, Classic, Gold Flake, Silk Cut, Navy Cut, Scissors, Capstan, Berkeley, Bristol and Flake. The Company has been able to build on its leadership position because of its single minded focus on value creation for the consumer through significant investments in product design, innovation, manufacturing technology, quality, marketing and distribution.All initiatives are therefore worked upon with the intent to fortify market standing in thelong term. This in turns aids in designing products which are contemporary and relevantto the changing attitudes and evolving socio economic profile of the country. Thisstrategic focus on the consumer has paid ITC handsome dividends<br />Foods<br />ITC made its entry into the branded &packaged Foods business in August 2001 with the launch of the Kitchens of India brand. A more broad-based entry has been made since June 2002 with brand launches in the Confectionery, Staples and Snack Foods segments. The Foods business is today represented in 4 categories in the market. These are<br />Ready To Eat Foods<br />Staples<br />Confectionery<br />Snack foods<br />In order to assure consumers of the highest standards of food safety and hygiene, ITC is engaged in assisting outsourced manufacturers in implementing world-class hygiene standards through HACCP certification. The unwavering commitment to internationally benchmarked quality standards enabled ITC to rapidly gain market standing in all its 6brands:<br />* Kitchens of India* Aashirvaad* Sun feast* mint-o* Candyman* Bingo!<br />Lifestyle Retailing<br />ITC’s Lifestyle Retailing Business Division has established a nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty stores. Wills Lifestyle, the fashion destination, offers a tempting choice of Wills Classic work wear, Wills Sport relaxed wear, Wills Club life evening wear, fashion accessories and Essenza Di Wills – an exclusive range of fine fragrances and bath & body care products and Fiama Di Wills – a range of premium shampoos and shower gels. Wills Lifestyle has also introduced Wills Signature designer wear, designed by the leading designers of the country.<br />Wills Classic work wear was launched in November 2002, providing the premium consumer a distinct product offering and a unique brand positioning. ITC forayed into the youth fashion segment with the launch of John Players in December 2002 and John Players is committed to be the No. 1 fashion brand for the youth.<br />Education & Stationary products<br />ITC made its entry into the stationery business in 2002 with its premium range of notebooks, followed in the year 2003 with the more popular range to augment its offering. ITC's stationery Brands are marketed as quot;
Classmatequot;
and quot;
Paper raftquot;
, with Classmate addressing the needs of school goers and Paper raft targeted towards college students and executives.<br />Agarbattis<br />As part of ITC's business strategy of creating multiple drivers of growth in the FMCG sector, the Company commenced marketing Agarbattis (incense sticks) sourced from small-scale and cottage units in 2003.<br />Hotels<br />ITC entered the hotels business in 1975 with the acquisition of a hotel in Chennai, which was then rechristened ITC Chola. Since then the ITC-Welcome group brand has become synonymous with Indian hospitality. With over 90 hotels in 77 destinations.<br />Packaging<br />ITC's Packaging &Printing Business is the country's largest convertor of paper board into packaging. It converts over 50,000 tones of paper and paperboard per annum into a variety of value-added packaging solutions for the food &beverage, personal products, cigarette, liquor, cellular phone and IT packaging industries. It has also entered the Flexibles and Corrugated Cartons business.<br />Agri Business<br />e- Choupal<br />The unique e-Choupal model creates a significant two-way multi-dimensional channel which can efficiently carry products and services into and out of rural India, while recovering the associated costs through agri-sourcing led efficiencies. This initiative now comprises about 6500 installations covering nearly 40,000 villages and serving over 4million farmers.<br />Leaf Tobacco<br />ITC is the largest buyer, processor and exporter of leaf tobaccos in India - creating a global benchmark as the single largest integrated source of quality tobaccos. Serving customers in 50 countries across more than 70 destinations, ITC co-creates and delivers value at every stage of the leaf tobacco value chain.<br />Information Technology<br />ITC InfoTech offers IT services and solutions across five key industry verticals: Banking, Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG) & Retail, Manufacturing & Engineering Services, Travel, Hospitality & Transportation and Media& Entertainment.<br />ITC InfoTech, a global IT services company, is today one of India’s fastest growing IT services and solutions providers.<br />Pricing strategy:<br />The pricing of the ITC food division depends upon the Customers’ demand schedule, the cost function and the competitors’ price. The pricing of the company is such that it caters to the need of all income groups of people but special provision has been kept for Low and middle income group, and their pricing are competitive with respect to other players like Britannia, Parle and Brisk farm.<br />The company follows the Going rate pricing that is the price of the product depends upon the competitors price. The firm chooses pricing more or less the same as Market leader.<br />Promotional activities<br />A particular budget is allocated for the promotion of the products, the local promotion scheme is decided by the Area Sales Manager, it give its suggestion to the District office and that is forwarded to the Head Quarter in Kolkata.<br />In another promotional scheme for Biscuits a particular number of cases is given freely to the distributors according to the amount of sale they make, this was a drop down promotion i.e. of the number of free cases that a particular distributors gets, off them a certain part is reserved for the retailers and customer if they buy a certain level of biscuit quantity.<br />Distribution<br />Buoyed by a strong distribution network ITC is likely to retain its market share in the cigarettes business; the ban on advertisements is likely to work in favour of ITC thanks to the recall factor.<br />The company's reliable distribution network also ensures superior inventory turnover than its peers.<br />Future <br />Today, the Aashirvaad brand stands for atta and salt and is expected to add suji, spices and rice in the staples segment. In the ready-to-eat segment, Aashirvaad has been expanding the range and the latest offering includes its combo packs of rice and gravies. Besides, an all-purpose curry paste has also been included in the range. To make a success of any foods business, apart from understanding the palate, it would be procurement and sourcing which have to deliver on two fronts: mainly that of quality and efficiency.<br />As for its ready to eat category Kitchens of India (KOI), the company’s strategy is to expand the KOI product portfolio. In this category, the company plans to introduce new products to meet the evolving needs of consumers. This premium brand is targeted at tourists, consumers who order at home, NRIs and women in the age group 25 plus.<br />Initiatives taken – <br />Let’s put India first<br />ITC is committed to a national agenda of raising agricultural productivity and making the rural economy more socially inclusive. ITC believes that the urgency and scale of these tasks make market linked solutions and innovations more effective and sustainable than capital intensive approaches.<br />Social & farm Forestry<br />ITC has helped to bring nearly 13,000 hectares of wasteland under social forestry benefiting more than 16,000 poor households in 466 villages. ITC’s social forestry programme simultaneously addresses the livelihood problems of marginal farmers and the ecological imperative of regenerating biomass and nurturing depleted soils.<br />Watershed Development<br />ITC’s watershed initiatives have led to an improvement in soil and moisture regimes –there is more land under irrigation, water tables have risen and farmers can harvest more than one crop, making it possible to live off the land round the year.<br />Agricultural Development<br />ITC offers facilitation to farmers to form agri-business societies, pool knowledge and resources, improve productivity and quality, and reach out beyond local markets to sell at better margins.<br />Women Empowerment<br />The confidence and skills generated among women by forming credit groups and managing businesses become assets to their communities<br />Livestock Development<br />The milk marketing co-operatives represent exemplary change in rural enterprise, away from dependence on agriculture and local markets<br />Primary Education<br />School going becomes an empowering process for the child and the community. The awareness of entitlements like education and health grows, along with a sense of the community’s responsibility.<br />ITC‘s e Choupal<br />The Big Picture:<br />ITC's Agri Business Division, one of India's largest exporters of agricultural commodities, has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis.<br />The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others.<br />The Value Chain - Farm to Factory Gate:<br />'e-Choupal' also unshackles the potential of Indian farmer who has been trapped in a vicious cycle of low risk taking ability > low investment > low productivity > weak market orientation > low value addition > low margin > low risk taking ability. This made him and Indian agribusiness sector globally uncompetitive, despite rich & abundant natural resources.<br />Such a market-led business model can enhance the competitiveness of Indian agriculture and trigger a virtuous cycle of higher productivity, higher incomes, enlarged capacity for farmer risk management, larger investments and higher quality and productivity.<br />Further, a growth in rural incomes will also unleash the latent demand for industrial goods so necessary for the continued growth of the Indian economy. This will create another virtuous cycle propelling the economy into a higher growth trajectory.<br />The Model in Action:<br />Appreciating the imperative of intermediaries in the Indian context, 'e-Choupal' leverages Information Technology to virtually cluster all the value chain participants, delivering the same benefits as vertical integration does in mature agricultural economies like the USA.<br />'e-Choupal' makes use of the physical transmission capabilities of current intermediaries - aggregation, logistics, counter-party risk and bridge financing -while disinter mediating them from the chain of information flow and market signals.<br />With a judicious blend of click & mortar capabilities, village internet kiosks managed by farmers - called sanchalaks - themselves, enable the agricultural community access ready information in their local language on the weather & market prices, disseminate knowledge on scientific farm practices & risk management, facilitate the sale of farm inputs (now with embedded knowledge) and purchase farm produce from the farmers' doorsteps (decision making is now information based).<br />Real-time information and customised knowledge provided by 'e-Choupal' enhance the ability of farmers to take decisions and align their farm output with market demand and secure quality & productivity. The aggregation of the demand for farm inputs from individual farmers gives them access to high quality inputs from established and reputed manufacturers at fair prices. As a direct marketing channel, virtually linked to the 'mandi' system for price discovery, 'e-Choupal' eliminates wasteful intermediation and multiple handling. Thereby it significantly reduces transaction costs.<br />'e-Choupal' ensures world-class quality in delivering all these goods & services through several product / service specific partnerships with the leaders in the respective fields, in addition to ITC's own expertise.<br />While the farmers benefit through enhanced farm productivity and higher farm gate prices, ITC benefits from the lower net cost of procurement (despite offering better prices to the farmer) having eliminated costs in the supply chain that do not add value.<br /> The Status of Execution:<br />Launched in June 2000, 'e-Choupal', has already become the largest initiative among all Internet-based interventions in rural India. 'e-Choupal' services today reach out to over 4 million farmers growing a range of crops - soyabean, coffee, wheat, rice, pulses and shrimp - in over 40,000 villages through 6500 kiosks across ten states (Madhya Pradesh, Haryana, Uttarakhand, Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan, Maharashtra, Kerela and Tamil Nadu).<br />The problems encountered while setting up and managing these 'e-Choupals' are primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenge of imparting skills to the first time internet users in remote and inaccessible areas of rural India.<br />Several alternative and innovative solutions - some of them expensive - are being deployed to overcome these challenges e.g. Power back-up through batteries charged by Solar panels, upgrading BSNL exchanges with RNS kits, installation of VSAT equipment, Mobile Choupals, local caching of static content on website to stream in the dynamic content more efficiently, 24x7 helpdesk etc.<br />Going forward, the roadmap includes plans to integrate bulk storage, handling & transportation facilities to improve logistics efficiencies.<br />As India's 'kissan' Company, ITC has taken care to involve farmers in the designing and management of the entire 'e-Choupal' initiative. The active participation of farmers in this rural initiative has created a sense of ownership in the project among the farmers. They see the 'e-Choupal' as the new age cooperative for all practical purposes.<br />This enthusiastic response from farmers has encouraged ITC to plan for the extension of the 'e-Choupal' initiative to altogether 15 states across India over the next few years. On the anvil are plans to channelise other services related to micro-credit, health and education through the same 'e-Choupal' infrastructure.<br />Another path-breaking initiative - the 'Choupal Pradarshan Khet', brings the benefits of agricultural best practices to small and marginal farmers. Backed by intensive research and knowledge, this initiative provides Agri-extension services which are qualitatively superior and involves pro-active handholding of farmers to ensure productivity gains. The services are customised to meet local conditions, ensure timely availability of farm inputs including credit, and provide a cluster of farmer schools for capturing indigenous knowledge. This initiative, which has covered over 70,000 hectares, has a multiplier impact and reaches out to over 1.6 million farmers.<br />