Executive Summary Unilever in India
Essay by Diederik van Duuren • April 3, 2016 • Case Study • 448 Words (2 Pages) • 1,511 Views
Executive Summary: Unilever in India.
Project Shakti, is a rural marketing initiative of Hisdustan Lever Limited (HLL) to not only spur growth and penetrate the rural areas of India but also offer value to society and empower women in the process. After a stabilisation in HLL’s turnover since 1998 and decreasing profits HLL faced the challenge of targeting the rural areas of India. The urban market rates are slowing down, with fierce competition in across all segments. With rural markets being the key differentiator among the FMCG industry the business objective was to reach untapped markets and develop the brands through local influencers.
Strengths: Strong brands of HLL and great reach, Great distribution network in urban areas of India. Subsidiary of Unilever with strong brand equity, able to launch and create new brands easily. Shakti created a vast team of local, credible, one-to-one endorsers. Local knowledge of markets through Self-help groups.
Weaknesses: Current distribution and transportation facilities in rural India, high dropout rate within Shakti entrepreneurs. High level of scepticism under locals.
Opportunities: Large domestic market with over 1 billion in population, large untapped rural market. Low brand awareness in rural areas, Increasing awareness for hygiene and beauty in rural India, Integrating social responsibility with business.
Threats: Fierce competition across all segments, Import restrictions have faded away. Low margins, Shakti people come up with own way to rewards friends and family.
Issues: Is this the ethical way to promote own company, what drawbacks are involved? How can women become more empowered, also education wise? How to solve the regional issues? Is this an effective strategy for (more) emerging markets?
How does the company succeed? | Challenges |
Understand the (rural) customers/segments | First time for women to be undertake in independent economic activities |
Provide social value and educate people | Tough start in male-dominant culture |
Appeal to large audience | Lack of TV or Internet |
Tackle cultural aspects | Lower income customers |
The project needed upscaling with revenues to increase exponentially without proportionate increase in costs since HR and management costs were 10-15% of Shakti revenues while the Vani and iShakti programmes costs 3-5% of total sales.
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