Hindustan Lever - Rural Marketing Initiatives

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Case Details:

Case Code : MKTG031
Case Length : 12 Pages
Period :2001 - 2002
Pub Date : 2002
Teaching Note : Available
Organization : HLL
Industry : FMCG
Countries : India

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HLL Goes to the Villages

Traditionally, HLL used both wholesalers and retailers to penetrate the rural markets. A fleet of motor vans covered small towns and villages. These vans induced retailers to stock HLL products and display advertising material in their shops. In many towns, there were redistribution stockists who carried bulk stocks and serviced retailers.

There were some 7,000 redistribution stockists who served over a million retail outlets. In the late-1990s, HLL realized that despite its pioneering efforts to expand its rural consumer base, a large part of the market remained untapped. Thus, the company set itself a target of contacting 16 million new village households by 1999.

This was to be achieved by strongly focusing on the sales, marketing, and production of the 'Power Brands' in the rural markets. HLL adopted a phased approach in order to meet its target and decided to address the key issues related to availability, awareness and overcoming prevalent attitudes and habits of rural consumers.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Penetrative pricing was also an important factor that was addressed. One of HLL's initial initiatives was in the form of 'Project Streamline' that was introduced in select states of the country in 1998. Project Streamline addressed the problems of the rural distribution system, to enhance HLL's control on the rural supply chain as well as to increase the number of rural retail outlets from 50,000 in 1998 to 100,000 in a time span of one year...

Staying on in the Villages

Continuing its focus on rural areas, HLL launched a massive rural campaign to reposition one of its leading brands, Lifebuoy, in February 2002. Lifebuoy was the single largest soap brand in rural India with 20 lakh soaps sold every year and had an estimated value of Rs 5 billion. The re-launch of 107-year-old Lifebuoy was primarily done to increase growth in the sluggish soap market. Commenting on this Category Head, Mass Market Soaps and Detergents, Sanjay Dube said, "It is the biggest and comprehensive re-launch of any of our brands."...


Exhibit I: HLL - Key Financials
Exhibit II: HLL - Product/Brand Profile
Exhibit III: About Rural Marketing
Exhibit IV: Indian FMCG Market - Brand Penetration

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