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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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"Consider the market, out of five lakh villages in India only one lakh have been tapped so far."

- Irfan Khan, Corporate Communications Manager, Hindustan Lever Ltd., in 2001.

Teaching People How to Wash Utensils!

In June 2002, the employees of Hindustan Lever Ltd. (HLL), a subsidiary of the fast moving consumer goods (FMCG) major Unilever and India's leading FMCG company literally took to streets. The company was undertaking a promotional exercise in the rural areas of three states - Madhya Pradesh (MP), Bihar and Orissa for its utensil-cleansing bar, 'Vim.' A part of HLL's ongoing television (TV) campaign, 'Vim Khar Khar Challenge1,' the promotion drive involved company officials to visit rural towns and demonstrate how vessels are cleaned with Vim. Commenting on this, Sanjay Bhel, HLL's Marketing Manager, said, "For the purpose, we are educating the rural masses on the on-going 'Vim Khar Khar Challenge' TV commercial by conducting live demonstrations about vessel cleaning.

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Our aim is to tap the growth rate of the Rs 4 billion2 scouring bar market - although it has been growing at a rate of 15% per annum, since last year it has been decelerating." This exercise was just one of the numerous marketing drives undertaken by HLL over the decades to increase its penetration in the Indian rural markets.

The company had, in fact, earned the distinction of becoming one of the few Indian companies that had tapped the country's vast rural population so extensively. It was therefore not mere coincidence that around 50% of its turnover came from rural markets.

With the penetration of their products reaching saturation levels in many urban markets, FMCG companies had to turn towards rural areas in order to sustain revenue growth and profitability. Since the disposable income in the hands of rural people had been increasing in the late-1990s and the early 21st century, it made sense for companies to focus their energies on this segment.

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1] The campaign featured ladies struggling to scrub and clean very dirty utensils, making a rough noise ('khar khar' is a Hindi language term denoting this noise) with an ordinary washing bar. Vim bar was then shown as the solution to the problem.

2] In October 2002, Rs 48 equalled 1 US $.


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