Unilever in India - Rural Marketing Initiatives

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Case Details:

Case Code : MKTA008
Case Length : 17 Pages
Period : 1998-2004
Pub Date : 2004
Teaching Note :Not Available
Organization : Unilever, Hindustan Lever Limited
Industry : Fast Moving Consumer Goods
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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Everybody wants brands. And there are a lot more poor people in the world than rich people. To be a global business and to have a global market share you have to participate in all segments.

- Keki Dadiseth, erstwhile Chairman, HLL¹.

The basic objective of Project Shakti is to economically empower underprivileged rural women by creating income-generating capabilities and providing a sustainable micro-enterprise opportunity in addition to improving rural living standards through health and hygiene awareness.

- Sharat Dhall, Marketing Manager -Rural, HLL².

Introduction

In the early 2000s, around 700 million people, i.e. 70% of the Indian population lived in 6,27,000 villages, in rural areas. Of this, 90% were concentrated in villages with population less than 2000.³ According to a study conducted in 2001 by the National Council for Applied Economic Research (NCAER), there were as many "middle income and above" households in rural areas as there were in urban areas.

There were almost twice as many "lower income households" in rural areas as in urban areas. There were 2.3 million "highest income" households in urban areas as against 1.6 million in rural areas.

NCAER projections indicated that the number of "middle income and above" households was expected to grow to 111 million in rural India by 2007, compared to 59 million in urban India.⁴

Gone were the days when a rural consumer had to go to a nearby town or city to buy a branded product. The growing power of the rural consumer was forcing big companies to flock to rural markets. At the same time, they also threw up major challenges for marketers.

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1] Rekha Balu, "Strategic innovation - Hindustan Lever Ltd.," www.fastcompany.com, June 2001, Issue 47, p- 120.
2] Swati Bharadwaj, "HLL targets I cr rural consumers by '05," www.economictimes.indiatimes.com, 30^th January 2004.
3] Source: www.hll.com
4] Shanti Kannan, "Rural market - A world of opportunity," www.hindu.com, 11^th October 2001.

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