Hindusthan Lever had a challenge with the competitors in Rural India. They devised a strategy to enter the market at the grass root level and utilize the entrepreneurial woman. Based on perceptions, there are some ethical questions. This case looks at the strategies on how to capture the emerging markets and work at the grass root level with the consumer behaviors. Not only understand the consumer behavior, but introduce the need and also the products to the consumers who NEVER used any product in that area.

1. Unilever in India
Hindustan Lever’s Project ‘Shakti’ –
Marketing FMCG to the Rural Consumer

2. Emerging Markets
• Huge opportunity, competition, no brand
awareness, people don’t understand the need
• Instead of pushing the marketing from top-down,
how do you shift the attention to bottom-up
strategy
• How does a company succeed
• Understand the Customer / Segments
• Provide the Value /Educate
• Cultural Aspects, Values, Needs => Win-Win

3. Definitions and Names
• Project Shakti = ‘Shakti’ means strength and
empowerment. Also name of a Hindu Goddess
• FMCG = Fast Moving Consumer Goods
• iShakti= information ‘kiosk’ operated & hosted by the
Shakti Entrepreneur
• Vani = Means Voice; reminds of a women name
• SHG = Self-Help Groups
• HLL = Hindustan Lever Limited

4. The Origin
• HLL was an established brand in India, largely successful in
urban regions
• Urban market growth rates slowing down
• Urban competition heating up
• HLL enjoyed greatest reach into rural markets, but rivals began to
emulate rural distribution initiatives
• HLL new it needed to find new markets
• Direct reach was only 16% of rural markets
• Project Shakti - an ambitious venture by HLL to spur growth and
penetration of its products in rural India while changing lives
and boosting incomes.
• Sales and Distribution initiative – delivers growth
• Communication initiative – build brand
• Micro-enterprise initiative – creates livelihoods
• Social initiative – improve standard of living in rural India

5. Project Shakti was born in Dec 2000, in the
district of Nalgonda, in the Southern
Indian state of Andhra Pradesh.

6. Project Shakti: The Objectives
• HLL's New Venture Division identified rural India as a
key source of growth and competitive advantage
• HLL argued that access to rural markets would be the
big differentiator among FMCG companies
• Business objectives: extend HLL's reach into untapped
markets and to develop its brands through local
influencers.
• Social objectives: provide sustainable livelihood
opportunities for underprivileged rural women.

7. Strategy
• SHG - functioned as mutual thrift societies
• 10-15 women in a village would form a group
• Small member contribution to common pool
• Sponsoring agency gave micro-credit
• Shakti Entrepreneur
• Borrowed money from SHG for purchases
• Tasked to sell HLL products in the village
• Generated significant income for themselves

8. Why Women?
• Women are the target consumers for most of HLL
products
• Rural women constituted the most marginalized group
in society
• Rural women were more likely to appreciate the
additional income than affluent ones in urban areas
• Women were more likely to access into homes of
potential consumers in villages
• Focus on women would have greater impact on the
entire household - leads to improvements in health,
hygiene, and education levels
• Most men would be occupied with other employment
and would not devote as much time to the activity

9. Crossing the Chasm
Challenge Solution
These women had never undertaken A Rural Sales Person (RSP) hired to
economic activities coach Shakti entrepreneurs
1st few months were the most Change in incentives: Cashrewards for
number of homes visited, instead of sales
difficult for entrepreneurs made; and delayed first loan payment.
HLL introduced low-unit-price packs
Lower-income consumers
= Sachet
By 2004, HLL was selling sachets of shampoo,
hair oil, detergent, skin creams, tea, toothpaste,
and soap to rural India.

10. Shakti Vani: The Communicator
• A branded social communication program
targeted at the rural community
• A local women was appointed as a ‘Vani’,
trained and positioned as an expert on matters
relating to personal and community health and
hygiene
• A ‘Vani’ covered a cluster of villages

11. iShakti – The Portal
• The iShakti information ‘kiosk’ is operated and
hosted by the Shakti Entrepreneur.
• Access to information on education,
employment, agriculture, health, personal
care, legal procedures, e-governance and
entertainment.
• Users can post queries on these subjects to
local experts who respond within 48 hours.

12. Scaling Up Issues
• HR (including management) costs
ballooned - 10% to 15% of Shakti revenues
• Vani and iShakti programs ran at 3% to 5% of
sales.
• Regional (State Specific issues)
• Varying levels of prosperity > affected the level of
infrastructure and ability to access villages
• Status of women across rural societies differed
• At least 12 different languages and dialects - made it
difficult for rural sales people to work across a state
• Many entrepreneurs, being barely literate and
underprivileged and living in a male dominated
society, had little self-confidence

13. Targets & Performance
• Target:
• Original: To reach 250 million additional consumers
through 100k entrepreneurs by 2010
• Revised: To increase the number of Shakti entrepreneurs
that we recruit, train and employ from 45,000 in 2010 to
75,000 in 2015.
• Performance:
• In 2004, PS grew to >15% of HLL's rural turnover
• By 2011, 45,000 entrepreneurs (‘Shakti ammas’) were
selling products to over 3 million households in 100,000
Indian villages.
Source: http://www.hul.co.in/sustainable-living/casestudies/Casecategory/Project-Shakti.aspx

14. Q. & A.
• A win-win for both sides – HUL makes money and also
spreads good. Comments?
• Any ethical issue with Project Shakti?
• Educating to create demand, increase consumption
• Pollution from packaging
• How could they tackle regional issues?
• Education differences
• Status of Women in Rural society
• Is this an effective Marketing strategy for emerging
Markets?