PROJECT ON

ROLE OF THE RURAL ECONOMY

Around 700 million people, or 70% of India's population, live in 6,27,000 villages in rural areas. 90% of the rural population is concentrated in villages with a population of less than 2000.

The rural India offers a tremendous market potential. A mere one percent increase in India’s rural income translates to a mind-boggling Rs 10,000 crore of buying power. Nearly two-thirds of all middle-income households in the country are in rural India. And close to half of India’s buying potential lies in its villages. Thus for the country’s marketers, small and big, rural reach is on the rise and is fast becoming their most important route to growth. Realizing this Corporate India is now investing a sizeable chunk of its marketing budget to target the rural consumers.

Rural India accounts for over 70 per cent of the country’s population. With urban markets saturated for most categories, it has become imperative for all players to increase their penetration levels in rural markets. There has been a rapid expansion of the consumer majors’ distribution networks into the rural regions. Companies like HLL and Colgate-Palmolive (C-P) have made sustained efforts through various programmes like ‘Operation Bharat’ (HLL) and ‘Operation Jagruti’ (C-P) to make inroads into the rural economy, in order to drive growth.

For the past three or four years, the bottom lines of most of the companies have improved due, on the one hand, to reduced excise duties and, on the other, to declining commodity and raw material prices. Besides, companies introduced cost rationalization measures, which helped them improve their operating margins. Reasonably high operating margins are necessary, in order to sustain the high ad-spends. However, stabilized commodity prices may put pressure on the margins in the future.

With increasing competition, the players have had to absorb a lot of price cuts to boost volumes. In the past one year, however, the industry has been reeling under a demand crunch.

RURAL CONSUMER’S AND INDUSTRY’S PROFILE

The consumer product sector mainly consists of personal care, cosmetics and home products segments. The sector can be further sub-divided into dental care products, soaps, detergents, surface cleaning products, skin care, and hair care products.

India's rural markets have seen a lot of activity in the last few years. Since urban markets are saturated in most categories, future growth can come only from deeper rural penetration. FMCG majors are aggressively looking at rural India since it accounts for 70% of the total Indian households.

The industry is volume driven and is characterized by low margins. The products are branded and backed by marketing, heavy advertising, slick packaging and strong distribution networks.

Despite the strong presence of MNC players, the unorganised sector has a significant presence in this industry.

Brand building and extensive distribution network is a key factor. A successful brand is a precious asset, which could fetch a price many times the cost of assets required to make the product. A study conducted by A&M-ORG-MARG reflects that the share of branded goods is high for a number of daily used products. Branded goods comprise of 65% of sales in villages and the share of non-branded products is shrinking dramatically.

Personal Care & Home Products market

The size of the Indian fast-moving consumer goods (FMCG) sector is close to Rs 600 bn. The northern and the western regions of the country account for more than half of the market for consumer goods. Barring the fastest-growing personal care segment, no other product segment has seen the entry of so many players.

In the past decade, the personal care industry has witnessed a consumer boom. This has been due to liberalization, urbanization, and an increase in the disposable incomes, and altered lifestyles, especially a heightened level of awareness among the rural community, consequent to the onslaught of satellite television. Furthermore, the boom has also been fuelled by the reduction of excise duties, dereservation from the small-scale sector and the concerted efforts of personal care companies to woo the burgeoning affluent segment of the middle class through product and packaging innovations.

Unlike in the past, when domestic companies were not perceived as competitive vis-à-vis multinational corporations (MNCs), the scenario is gradually changing, with some domestic companies, like Nirma Marico and Jyothi Labs, standing up to their MNC counterparts. Also, competition amongst the MNCs has intensified, leading to shrinkage of margins.

The personal and home care segment has very low entry barriers of technology and capital requirements. This attracts new players and has resulted in intensifying competition. Despite this, the strong distribution networks and heavy investments needed for brand building remain key deterrents to new players.

Low margins and high volumes characterize the industry. While the level of disposable incomes determines the overall sector growth, the market has already been segmented and sub-segmented. Companies have launched products at a number of price points to drive up volumes. New products are being launched in niche segments, and old products re-launched. Brand equity drives the customer’s purchase decisions, and is the key to gaining market share. Also, competitive pressures have hiked the advertising budgets of most players. Besides, a profusion of promotional schemes are being offered. Most players, including Hindustan Lever Ltd (HLL), are struggling to maintain top line growth, despite the heavy advertising and salespromotion (ASP) expenditure.

A lower price differential between the organized and the unorganized sectors from reducing excise duties allows the former to grow at the expense of the latter. The organized sector also has a superior distribution reach. Although most of the product categories are still in the growth phase, a few broad categories, like detergents, have reached a mature phase only in the urban market. According to industry sources, the affluent segment in the rural sector is growing at a faster rate than the urban one. For the past three years, the organized sector has been focusing on the rural markets, which are perceived to drive growth in the industry and which, to a very large extent, are dominated by unorganized players

Penetration Levels in rural area

The personal and home care market is a mature one in urban.However, for the past three years, it is witnessing a lot of changes, in terms of product and usage patterns.

Products in the soap, detergent and hair oils categories have high penetration level (over 70 per cent). The value growth is mainly through higher realizations and improvements in the product mix. The popular and economy segments currently dominate most of the product categories. With an increase in disposable incomes, the preferences of the target market would shift to the premium products.

For products in the hair oil and dental care market, the thrust of the organized sector is to convert users of non-branded products to branded ones.

The premium product categories like shampoos, skin care and cosmetics continue to have low penetration levels even in the urban areas and have achieved volume growth through packaging innovations and value growth through increased realizations. In the shampoo segment, sachet packs, which contribute to over 30 per cent of revenues, have been successfully used to break the price barrier and have offered convenience and affordability.

In the product categories of mosquito repellents, where consumption is dictated by need, and shaving blades, which has low penetration levels, entry barriers are relatively high. Only players with strong brands can pass on cost increases

Prudent in pricing – rural consumers: The Indian consumer is very price sensitive. In the personal care sector, branding allows companies to partially pass on the cost increases to the customers. Most players have introduced products with mass-market pricing, so as to build volumes. The increased promotional activity that is taking place amongst players has relegated brand loyalty to the backseat. Moreover, the increased competition has restricted not only growth rates, but also the ability to absorb frequent price increases, thus benefiting the consumer. With the rise in disposable incomes of consumers, players in the premium-product categories will be able to increase volumes.

The players in the personal care industry derive their strength from high capital turnover, strong brand equity and effective management of distribution logistics. The strength of the distribution reach is a key element in building a successful brand and helping it garner volumes through increased penetration levels. Nowadays, companies with strong distribution networks are using them successfully to distribute other companies' products as, for instance, Marico's distribution agreement with P&G, to distribute its brands (Ariel bar, Camay Soap, Pampers diapers, Old Spice) for a fee. Such arrangements will enable newer players to penetrate the markets without having to set up their own distribution networks.

However, a strong distribution network can only succeed when used in tandem with the right packaging and pricing. In the price-sensitive rural economy, companies have to constantly launch value-for-money products that satisfy the needs of the rural consumer. This has brought about the mini-pack revolution, which has become common across all product categories. Brands like Ariel, Surf, Colgate, Sunsilk, Pantene, etc. are now available in sachets and pouches at very low unit prices that can induce trials and push consumption levels. Breaking the price barrier has become the key to drive volumes, especially for companies like HLL and C-P, which derive almost 35-50 per cent of their revenues from the rural market.

FMCG consumption in rural areas:Organizations like Hindustan Lever Ltd., Nirma Chemical Works, Colgate Palmolive, Parle foods and Malhotra Marketing have carved inroads into the heart of rural markets. Various categories of products have been able to spread their tentacles deep into the rural market and achieved significant recognition in the country households. And, in the process, the regional brands, local brands and the other unbranded offerings got displaced by the leading brands.

Company Household penetrationHLL-VIMNirma Chemical WorksColgate PalmoliveParle FoodsMalhotra marketing

88%56%33%31%27%

Category% volume of local brands/unbranded

Washing cakes/bars TeaSalt

88%56%33%

Of the expenditure on consumer goods in rural household, approximately, 44% is on food articles such as biscuits, tea, coffee and salt, 20% on toiletries, 13% on washing material, 10% on cosmetics, 4% on OTC products and 9% on other consumables. A number of category products have established themselves firmly in the rural households.It is evident that in the villages low-priced brands are well accepted and one might feel that a larger proportion of the purchases made in rural market can be attributed to local/ unbranded players. Surprisingly, however, the unbranded/local component contributes to a substantial portion of the volume of only a few of the highly penetrated categories.

Increasing brand awareness among rural consumers:

In the rural families, studies indicate a slow but determined shift in the use of categories. There is a remarkable improvement in the form of products used. For instance, households are upgrading from indigenous teeth-cleaning ingredients to tooth powder and toothpastes, from traditional mosquito repellant to coils and mats. There is also a visible shift from local and unbranded products to national brands. From low-priced brands to premium brands.

About HLL

HLL has over 36,000 employees, and has created 2 lakhs indirect jobs. Its operations are spread across 70 locations in India. There are over 50 factories, of which 28 are in backward areas. The operations involve 2000 suppliers and associates and 7000 stockists and agents. HLL has emerged as a major Exporter.

Corporate Profile

HLL, a 51.6% subsidiary of Unilever Plc, is the largest FMCG Company in the country, with a turnover of Rs. 118 bn. The company’s business sprawls from personal and household care products to foods, beverages and specialty chemicals. The company has a dominating market share in most categories that it operates in such as toilet soaps, detergents, skincare, hair care, color cosmetics, etc. It is also the leading player in food products such as packaged tea, coffee, ice cream and other culinary products.

Market Share

HLL grew at a fast pace in the mid 90’s driven by its aggressive acquisition spree. From Rs. 38 bn turnover (contributed 70% by soaps, detergents and personal products), HLL’s turnover has now grown to Rs. 118 bn, with soaps and personal products contributing 57% to turnover and beverages and food products contributing to 29% of turnover. Growth during the last few years has largely been driven by the personal products business. However the pace of growth has slackened significantly in the last two years with several key segments registering a degrowth in 2001.

Even as Hindustan Lever is armed with two brands -- Nihar and Cococare -- positioned to take on Parachute, the clear strategy adopted by HLL is to attack Parachute indirectly by targeting the loose oil consumer.

HLL's overall share in the Rs 500-crore coconut hair oil market is about 24 %. Marico leads with a 53 % share. HLL's Nihar has appreciated its market share to 17.2 % in May 2000, from 12 % in end-1999, as per ORG-Marg All-India retail audit. The brand's share in the beginning of 1999 stood at 9.5 %.

Performance of HLL in 2001

Turnover for the year increased by 3.42 % gross and 3.47 % net.

Product Categories:

Soap and Detergent

The overall market growth for Soap & Detergent was sluggish during the year with a sharp decline in the Popular & Premium segment of the market. In particular, rural market where the business had a traditionally strong presence performed poorly following decline in the agricultural growth. The discount segment continued to face severe price led competition. Against this background, the business registered a relatively better performance in term of growth. Major investment were made behind quality enhancement of key brand like vim, Lux, Surf and Wheel during the year with clear consumer benefit. These were backed by some strong consumer promotion during the year including multi pack. Lifebuoy Active was launched during the year and in short time, the brand grew handsomely with a 3.7 % share of the segment. This helped offset the decline of Lifebuoy Carbolic. Major investment had been planned to retain and grow the Lifebuoy franchise in 2002.

Overall, Power Brand grew significantly ahead of the market and are poised well for a strong performance once the market turn around with the impending economic revival. Innovation will continue to drive growth in the following year, with several projects in the pipeline.

Major initiative to improve distribution reach, particularly in the rural market, were undertaken during the year to build upon the competitive advantage that the business currently hold in sales and distribution. Significant investment were also made in networking and Information Technology IT to manage supply chain more efficiently and make a quantum improvement in the customer service level. Project LEAP which bring together the combined strength of IT, Sales and Commercial to deliver better customer service and make the entire supply chain including the back end system connected with supplier of material respond faster to the short term change in the market place, had been implemented toward the end of the year in the Soap Business and the initial result were encouraging. The

focus in 2002 will be to stabilize the system and prepare for rolling it out to other businesses.

A few highlight of the 2001 brand performance are:

With Wheel and Rin, the business not only recorded brand leadership again after a decade but also captured No 2 in Laundry.

Lux recorded it highest ever share in the last 24 month.

Wheel Green Powder share are at their highest in 24 month.

Surf Excel had recorded it highest value share ever.

The business also created new benchmark in capacity creation with 4 new plants 2 for NSD Bar, 1 for Soap for NSD Powder being commissioned in record time. These factories had stabilised very quickly giving significant supply chain and tax benefit to the business.

Superior Technology in the business repertoire will be leveraged to deliver improved quality at lower cost to achieve profitable growth. The Business sees a big opportunity in market growth in the medium to long term, particularly in the rural area, and had initiated programme to drive consumption of soap in the context of the increased awareness of health and hygiene. For the year 2002, market growth, which is linked to the turnaround of the economy, remains the major risk factor.

Personal Product:

Personal Product had led a good year in 2001, with double-digit growth. This was achieved by focusing on the core brand and investing in building their equity. In spite of slow market growth, your Company increased it investment in innovation, research and advertising on it big brand resulting in growth ahead of the market.

The Hair Category had another year of growth, with high quality relaunches of Clinic Plus, Clinic All Clear bottle were changed in line with international development, while a new stand up pack was launched in the mid price

segment. Your Company entered the nascent category of hair colourant, with the launch of Sunsilk hair colour in the metro. In order to address the

opportunity at the low price end of sachet, Lux sachet were launched at price of Re1 and Re0.50, and these had met expectation.

The Skincare Category had a very good year, with Fair & Lovely as star performer in 2001. In Fair & Lovely, the launches in 2001 included a fairness soap, a dark circle under eye cream, and sachet with a recloseable cap. The main Fair & Lovely cream brand was also relaunched with improved packaging and communication. All these initiative, along with investment in advertising and rural penetration, led to high growth for the franchise through the year.

The Pond brand returned to double-digit growth after a slowdown for 2 year, with comprehensive relaunches to it talc as well as skincare range. The growth was achieved by improvement in the functionally of product, packaging and impactful market activity. A new talc variant, pond Light n Fresh, and a new mini Clod Cream jar priced at Rs5 were successfully launched in 2001. The skin range of Lakme was renovated and strengthened and a premium new product, Lakme Fair Perfect, was introduced toward the end of 2001.

In the Oral Category, Pepsodent was relaunched and emerged much stronger in 2001 as a result of innovation, advertising and marketplace activation. The introduction of value pack as well as new advertising helped increase market share of Pepsodent. Your Company decided to deprioritize the toothpaste brand Aim, in order to focus all effort on Pepsodent and Close Up this strategy had been successful as demonstrated by the growth and brand building that had been achieved in the second half of 2001.

In the Deodorant business, Axe continued on a high growth plan, with many imaginative market activities and new introduction in 2001. Rexona was relaunched with international packaging and had achieved salience on the 24 hours delivery of deo benefit.

Colour cosmetics saw many innovation on both Lakme and Elle 18 including a new range of colour based on the Lakme India Fashion Week.

HLL acquired the asset and liabilities of it colour cosmetics, fragrances and personal care business from Lakme Lever Ltd at net book value, with effect from 31/3/2001. Post merger, Aviance business continued to focus on direct marketing of personal care product to gain better understanding of this channel .

Supply chain and souring efficiencies led to significant cost reduction, whilst quality improvement came through technologies and innovation. Your Company continues to focus on low unit price pack, which provide the consumer with quality product at low put down price. A new Personal Product factory was commissioned in Doom Dooma in Assam, to cater to the growing market demand. to other businesses.

Product-“vim” HLL

“Khar Khar ka moh tod jawab”

In 1993 Vim Bar was launched. This product had many benefits including better clean, ease of handling and easy storage. Vim Bar was re-launched in 1997 with an improved formulation and new communication, which tackled economy and performance. Much appreciated by the mass market, it resulted in conversions not just from powder users, but also from proxy users who did

not upgrade to powders but preferred to use Vim Bar instead.

Vim Dishwash Bar is the market leader with 60 per cent share in the Rs 400 crore branded dishwash market The brand has grown significantly registering strong double-digit growths in both volume and value terms.

Vim Bar was relaunched a second time in 2002, with a unique “Stain Cutter” formulation that removes the toughest stains such as burnt milk and ghee stains. This new formulation evolved through research and is now setting benchmarks in tough stain removal. New Vim offers the consumer a superior performance at a great value. . New Vim with its contemporary packaging illustrates dynamism and swift stain cutting powers. HLL is focused on research and development for consistent delivery of superior products. Thus, New Vim has been developed with a unique stain-cutter formulation that removes the toughest stains such as burnt milk and ghee stains. New Vim offers the consumer a superior performance at a great value”. The new Vim has a totally new mix, right from the packaging to the formulation of the product. New Vim with improved formulation that solves the housewife’s yet unsolved problem of tough stain removal of burnt milk/ghee stain.

.

Vim is the market leader in the dishwash category. Today Vim is available in powder, bar and liquid form. Vim continuously strives to innovate its products to enhance the lives of its consumers. Whether it be through its new 'Stain Cutter' formula in its Vim Bar or it's the stain busters in its powders, Vim stands for the best quality in dishwash products.

Vim as a Brand

Vim, among Hindustan Lever's 30 power brands, is looking at scouring the competition further. Though the brand — led by the flagship Vim bar — remains the market leader in the overall Rs 1,000-crore dishwashing market, HLL `complete kitchen cleaner' Vim (utensil cleaner), which is ranked the fourth most preferred brand in urban market, doesn’t find a place in the top ten in the rural market On brand equity ranking. Though it was a market leader Vim Dishwash Bar is the market leader with 60 per cent share in the Rs 400 crore branded dishwash market The brand has grown significantly registering strong double-digit growths in both volume and value terms

Hll planned for brand extension

Another brand extension was planned is that of an `applicator', to be priced at parity with nylon scrubbers. Currently, Scotchbrite is the only branded applicator in the market, priced at a premium.

HLL has projected a Rs 260-crore turnover for Vim this year, which translates to a 21 per cent growth over the previous year.

Vim bar, which accounts for over three-fourths of the Vim brand's sales, is expected to be the key driver of growth. "Of the projected Rs 260 crore, we expect Vim bar to be a Rs 240-crore brand by the year-end, with Vim detergent powder and Vim liquid accounting for the remaining Rs 20 crore,"

the official sa Vim liquid, meanwhile, would continue to be a slowburn brand.

Vim also planned to extend the brand by introducing Detergent liquids . detergent liquids is a small, though emerging market and has a limited presence of brands such as Vim, Teepol and Pril. The market is estimated at 600 tonnes, or roughly Rs 200 crore. Vim liquid was rolled out recently in cities and towns with 10-lakh-plus population.

Market Size:

The total size of the dish wash market, estimated at Rs1,000-crore, recorded a 40 per cent growth over last year. Over 60 per cent of the market is dominated by bars, while dish wash powders accounts for 32 per cent. The penetration levels are, however, still very low. Estimates show that nearly 50 per cent of the urban population and 80 per cent of the rural one still use proxy products like ash and other cheap detergents for dishwashing purposes. HLL is the leading player, with its Vim Bar.

MARKET SHARE:

Of the overall Rs 1,000-crore diswashing market, the branded sector accounts for Rs 400 crore. According to AC Nielsen data, within the dishwashing bar segment, Vim's market share is estimated at 82 per cent share.

Competitors

The brand faces tough competition from Nirma (in the North and West), Odopic (in the West) and Sabena (in the South) it was the strongest in maharashtra.

Marketing strategy adapted by HLL

The company handed over the marketing for vim to O&M in Maharashtra and Andhrapradesh .O&M rural marketers adopted unique strategy in the initial stages to market the product in rural areas Maharashta and Andhrapradesh. As the marketers knew that it was the initial stage in rural areas and to provide a niche in the rural markets was difficult as the product itself was not available in this areas.

First to target the market in rural areas they saw to it that the market which they are targeting was in the 2 to 3 km range from the highways because they knew it wont create sense to market the product in those areas which are away from the high ways as the product was not available in those areas. The overall marketing was based on district-to-district level. They had thought to enter in other areas beyond the 2to3km range after making the product available to the initial targeted market. So that it becomes easy for the marketers to introduce, as the product was available in the neighboring villages and the product becomes familiar to the people.

Marketing segmentation

The market segmentation was in those areas was done on the basis of the houses that the people were living into. As the people in rural villages lived in different types of houses. The type of the houses they lived were kaccha ghar, kaccha-pukka, pukka ghar the marketers also surveyed the per capita income of individual in rural areas.

Challenge

1) The challenge for marketers was to convince the rural consumer and ask them to spend money on a product where they use to spend no money on a particular product. As the consumer used proxy products to clean their vessels, which was available to them at, free of cost. The real challenge was to transform the prospect to the consumer of the product.

2) The other challenge was to communicate to the rural people. It was difficult for the marketers to communicate to the rural people unless they were communicated in their own regional or local language of the rural consumer.

3) After the survey done it was found that the rural consumer used aluminum vessel to cook their food this made the company to change their entire communication. Earlier the company use to communicates as,

“apka chehra bhi dekha ga saf”.

Now seeing that the rural consumers were using aluminum vessel. It was a challenge for the marketers to appeal and communicate the product to the rural consumer and as it wont be sensible to communicate them with the same communication or base line. To come with new communication or tag line which the rural consumer can relate with their usage and behavioral pattern.

Target consumer

Target consumer for “vim” were Households wives Restaurants Shops and hotel that offer cooked food products

Advertisement:

HLL to advertise the vim used both medium of communicating that formal as well as informal.

Formal advertising was done through:1) Newspapers and magazines2) Television3) Radio4) Cinema5) Outdoor advertisement through:

Signboards Wall painting Local bus boards Product display boards between villages

6) Point of purchase used were

a) Streamersb) Tinplatesc) Hangings

Promotion strategy

This strategy was used at village to village basis

Use of audio- video vans

Door to door marketing

Mohalla’s

Retail contact

Central location

In the process of promoting “vim” in rural areas. Keeping into mind The dynamics of rural consumer and distribution infrastructure, the marketer had adopted a different promotion strategy to promote the vim in rural areas.

The formal media used to communicate the product was T.V, radio cinema ,print proportionately depending upon their reach and their influence on rural masses.

The informal promotion strategy was formulated. The steps involved to promote the product in rural areas.

The first step was the usage of audio- visual publicity vans. This publicity vans were covered by beautiful banners, this banners were embossed with the product photos, the base or tagline of the product and colorful picture

that can attract the rural consumer. The audible material used were a tunes of current filmy songs, which were composed with new lyrics, this lyrics gave the special features about the vim. This step was used as an introduction of the product vim in rural markets.

The second step in the promotion strategy was to do Door-to-door marketing. This step was very well designed. To do Door- to- door marketing the marketer employed the young local youths who can communicate with rural people in the local language. This youth carried along with them flip charts as a substitute medium to T.V.

This flipchart contained a story. The story used in the flip chart was about two female named “ Kamala” and “bimla”. Explaining that kamala used vim and bimla used other proxy product. Kamala showed bimla the benefit of using vim in compare to other proxy product and explaining the features of the product. The Door-to-door marketing step was complementary to other step that involved the participation of the rural housewives, which contained games. This games were strategically designed so as to position the product and the price of the product in the minds of consumer.

The games used were

Spotting the right price. Match the pairs. Turn the wheel

This games were used to entice the people and pull them to “mohalla” the

small place between the houses so as to do mass marketing as much as possible. This all was done as process of mass marketing.

The fourth step in promotion was Retail contact

In this step the marketers gave scratch coupons to the consumers who came to purchased vim with incentive packages (i.e. packages one for two). The price given were on the. The prizes distributed to whom so ever won was 12months soaps. Prizes were distributed on the spot so to create better perception of the company and product in the mind of the consumer. The same was made applicable for the retailers on the bulk purchase. This retailers were also given special discount on their bulk purchase.

The final step was that all the people were invited to the central location. This central location was usually a place were all the village people assembled so that becomes easy to communicate at large to the masses. The activity undertaken at the central location was cleaning up the sweet makers vessels, which was the toughest to do.

It was communicated as

“ Saf kare mitaheewale ki kadai” This exercise of promoting the product was one of the best as when it was proved in front of the consumer as vim cleaned “ the mitaheewale ki kadai” without living any greasiness. The advantages of the Vim were also shown to them. The advantages of vim were that it relieved from the hardship of scrubbing the vessel, which was done with ease with the help of “vim”. The other advantage was that it would certainly save their lot of time, which can be utilized effectively for some other work. This created a clear perception about the product.

This process was used again and again in capturing different markets.

The other promotion strategy to promote the product

Roadshows comprising attractively designed floats will traverse the length and breadth of the country during the time span of the offer.

The carnival, which will cover hundreds of small towns and villages apart from the metros and is part of a massive rural promo initiative that HLL plans to unleash.

The company even had to promoted the product in Haats & Melas of different villages.

To promote the vim HLL planned to distribute gold as prize

IN a bid to promote vim one of its leading dishwash soap, Vim Gold Bar, HLL had launched a below-the-line advertisement.

This medium proposes to bring Vim to the rural households via direct interaction between customer and producer.

This promotional blitzkrieg across the country includes giving away gold worth Rs 5 crore.

The offer gives; customers stand a chance to win gold in different denominations by just scratching a card received on every purchase of a Vim bar.

Each scratch card carries an 8-digit number. Every Sunday, one such number will be announced on Sony Entertainment TV between 8-9 p.m. and this number will be valid for the entire period of the offer.

If the number on the scratch card of the consumer matches with the number announced on TV, they would be eligible for a 400 gm gold bar - the weight of the Vim bar in gold.

In case of fewer digits matching, the consumer stands to win 100 gm, 10 gm, or 1 gm of gold or Rs 100 off on purchase of HLL products from the retailer

Communication

Vim Bar has always created an impact in the market with its path-breaking communication. The communication has been designed to powerfully communicate the tough stain removal properties of the Vim Bar. HLL created a new consumer lingo for the tough stain problem with the campaign baseline of Vim being the “Khar Khar ka moh tod jawab”.

HLL had to completely change its communication when it entered into rural it had to completely changed its communication from the previous one that was that after cleaning the vessel with bar you can see your fac(apka chehra Bhi dekha ga saf) to (khar khar ka moh tod jawab) just because the rural consumers used aluminum vessels to cook their food. It wont create sense to appeal them to buy that product that did not suit their living.

Pricing

Initially Vim bar was priced at Rs 14 for 400 gm. An entry-level Rs 200-gm Vim bar priced at R s 7 also exists. But with the launch of new vim it was priced at Rs 13 for a 400 gms pack and Rs 6.50 for a 200 gms pack. But with their foray into the rural areas the price was changed to Rs4 for 200gm and Rs7.50 for400gm. The prices were revised by keeping the consumer behavior, income, and consumption pattern of rural people.

Packaging

The rural customers are usually daily wage earners and they don’t have monthly incomes like the ones in the urban areas have. So the packaging was done in smaller units and lesser-priced packs that they can afford given

their kind of income stream. Another important factor is Convenience. Since many households don’t have proper bathrooms and only have a window or things like that to keep such things

The packaging of “ VIM” done keeping in mind the rural characteristic. The paper wrapped to vim bar was in yellow colors showing the brand name vim and containing the picture of lime clearly to show that it got lime contents in it. The colures used are red, yellow and green. This sort of packaging what made vim to be the market leader in the dish wash market .

Distribution:

Mother depot( C&Fa’s)

Rural distributor

Sub-stockiest

Retailer

consumer

HLL distribution system is the best amongst FMCG companies. At present, HLL's products, manufactured across the country, are distributed through a network of about 7,000 redistribution stockists covering about one million retail outlets. Extending availability Data on rural consumer buying behaviour indicates that the rural retailer influences 35% of purchase

Mother depot C&Fa’s

Rural distributors

Sub-stockiest

Retailers

Consumers

occasions. Therefore, sheer product availability can determine brand choice, volumes and market share.

HLL used the principle of project stream line .The principle of Project Streamline is to leverage our scale and organizational synergy to increase reach in rural markets. The pivot of Streamline is the Rural Distributor (RD), who has15-20 rural sub-stockiest attached to him. Each of these sub-stockiest is located in a rural market. The sub-stockiest then performs the role of driving distribution.

Project Streamline was conceptualized to significantly enhance control on the rural supply chain through a network of rural sub-stockiest, who are based in these very villages. As part of the project, higher quality servicing, in terms of frequency, credit and full-line availability, would be provided to rural trade. Thereby, giving us a substantial competitive edge over the next decade

The role performed by the Redistribution Stockiest has also undergone changes over the years. Financing stocks, providing manpower, providing service to retailers, implementing promotional activities, extending indirect coverage, reporting sales and stock data, screening for transit damages are some of the functions performed by the RS today.

The RS was required to provide the distribution units to the company salesman. The RS financed his stocks and provided warehousing facilities to store them. The RS also undertook demand stimulation activities on behalf of the company.The RS would be able to provide customer service only if he was serviced well. This knowledge led to the establishment of the "Company Depots" system. This system helped in transshipment, bulk breaking, and as a stock point to minimize stock-outs at the RS level.

In the recent past, a significant change has been the replacement of the Company Depot by a system of third party Carrying and Forwarding Agents

(C&FAs). The C&FAs act as buffer stock-points to ensure that stock-outs did not take place. The C&FA system has also resulted in cost savings in terms of direct transportation and reduced time lag in delivery. The most important benefit has been improved customer service to the RS.

Certain C&FAs were selected across the country to act as mother depots. Each of them has a minimum number of JIT depots attached for stock

requirements. All brands and packs required for the set of markets which the MD and JITs service in a given area are sent to the mother depot by all manufacturing units. The JITs draw their requirements from the MD on a weekly or bi-weekly basis.

The other distribution system used was Project Shakti and Project Bharat . Our rural growth engine raises incomes of rural families by channel intervention through rural Self-Help Groups (SHG), which operate like direct-to-home distributors. The model consists of groups of (15-20) villagers below the poverty line (Rs.750 per month) taking micro-credit from banks, and using that to buy our products, which they will then directly sell to consumers. In the process, generating employment and incomes for themselves, and increasing the reach of our products.

PROJECT ON

RURAL MARKETING

“VIM”

SUBMITTED BY :

ACKNOWLEDGEMENT

It gives me a great pleasure in presenting this report on the subject rural marketing and enables me to get the insight knowledge about the subject rural marketing

I would like to thank Prof.Krishnamoorty for givin me time to time guidance as and when required for completing this project

Lastly I express my gratitude towards Mr Rahul. Karwe(O&M OUTREACH Desk) for providing me with the information about the marketing acivities undertaken for vim in rural areas.