UNILEVER IN INDIA: HINDUSTAN LEVER’S

PROJECT SHAKTI – MARKETING FMCG TO

THE RURAL CONSUMER

Team: Can Do!

Members:
Roman Ivasyshyn
Antonina Volkotrub
Danylo Hauk
CONTENTS
 Assumptions
 Current State & Goals
 Solutions & Recommendations
 Summary
REINDEERS & SLEIGH

At first, we sought to employ flying reindeers to distribute HLL

goods to inaccessible villages with low business potential, but
were not able to book them due to their tight schedules and
decided to stick with a Shakti project.
ASSUMPTIONS
 ASSUMPTIONS
 Project Shakti operates in villages with 200 to 4.999 residents
(509.416 potential villages)
 Shakti entrepreneur purchases stocks from the nearest official
distributor (with the discounts available to stockist (-5%) -2%
additional percent ), transporting the goods with the locally
available means of transportation
 Extrapolation of revenue growth rate from projects other than
Shakti is 2%
 Total revenue in 2010 approximated at 154,8 bln Rs. (Calculated
using growth rate 2% yearly for projects other than Shakti
(80%TR) and adding 20% of TR, coming from Shakti)
 In 2010 Revenue from Shakti project should account for 20% of
HLL Total Revenue (31 bln. Rs)
ASSUMPTIONS (CONTINUED)
 In 2004 average revenue per consumer per year is 30Rs
(120.000 Rs target revenue per entrepreneur per year /4.000
(target number of consumers per entrepreneur in 2006 ))
 On average 1 Shakti entrepreneur covers 4.000 consumers in
3 to 8 villages (different years, different areas)
 Target average revenue per consumer per year in 2010 should
be 123,88 Rs (Revenue from Shakti (31 bln. Rs) / target # of
consumers(250.000.000 ))
 Yearly average organic growth of revenue from a consumer
should be 27% (2004-2010)
 Yearly average growth of Shakti consumers is 25,8% (starting
in 2004)
 48 mln consumers in 2004 (estimated from the target growth
trend of number of consumers)
 Revenue from Shakti in 2004 estimated at 1,4 bln Rs
(approximated from trends of average consumption and
growth of number of consumers)
CURRENT STATE & GOALS
CURRENT STATE & GOALS
Current state & goals 2004 2006 2010
Revenue from Shakti (bln Rs.) 1,4* 4,8* 31*
Consumers (mln) 48* 100 250
Entrepreneurs (k) 12 25 100
Villages (k) 50 100 400*
*Numbers brought up from assumptions
OBSTACLES
 Poor rural infrastructure( telecommunication and roads )
 Problems with women rights in northern states of India
 Poor managerial and professional skills of most Shakti
entrepreneurs
 Bad internal communication of project Shakti in HLL
 Business and social interest conflict in this project
 High human resources costs of the project (10%-15%)
 EXPECTED REVENUES
Rs. 180,000,000,000.00

Rs. 160,000,000,000.00

Rs. 140,000,000,000.00

Rs. 120,000,000,000.00

Rs. 100,000,000,000.00 Revenue from Shakti

Rs. 80,000,000,000.00 TR without Shakti

Rs. 60,000,000,000.00 TR

Rs. 40,000,000,000.00

Rs. 20,000,000,000.00

Rs. 0.00
2004 2005 2006 2007 2008 2009 2010

The red line represents expected total revenue , excluding expected revenue from
project Shakti. This data was derived from TR in 2004. Expected growth rate was
estimated at 2% yearly. (This trend was guesstimated from data extracted from the
case ) .
The orange line represents the Revenue that should come from the project Shakti.
The numerical goal in 2010 was set from the percentage goal mentioned in the case
(20% of TR should come from project Shakti). Starting with initial 1,4 bln
Rs.(assumption) The target trend was estimated from target yearly growth trends of
average consumption 27% and increase in number of consumers 25,8%.
The blue line is the sum of red and orange lines.
 SOLUTIONS &
RECOMMENDATIONS
SOLUTIONS & RECOMMENDATIONS
Both intensive (growth of the revenue per consumer) and
extensive (growth of the number of consumers out of the
Shakti target areas) growth should be achieved.
 New entrepreneurs appointed and villages selected
 Identify the villages with the most business potential out of Shakti target
area.
 Appoint a newly selected Shakti entrepreneur (selected by SHG with our
criteria) to an area with a population from 6000 to 8000 residents (3-8 villages)
 Cascading project goals and growth to an individual
entrepreneur
 Shakti entrepreneur should have 3-6 month to reach the goal of 4000
customers (50-67% of population) and then a penetration rate growth should
be 5-15% depending on the year of operation and area.
 Average consumption rate of clientele of a Shakti entrepreneur should
grow 27% every year, starting with 38 Rs per consumer in 2005. (target 124 Rs
in 2010) Those joining after 2005 will have 3-9 month to gain target average
consumption for that particular year (2006- 49 Rs;2007-61Rs;2008-78Rs; 2009-
100Rs)
SOLUTIONS & RECOMMENDATIONS (CONTINUED)
 Optimize the skill training programs for the Shakti
entrepreneurs
 Implement a Shakti notebook (not PC), which would be adopted to
the usual project tasks and goal setting
 The coach, additionally to the previous tasks, will help to set goals
and tasks for the first week on the first visit. On the second visit (in
a week) she/he will check for completion of the goals and tasks. If
they were not completed, coach should help analyze why not and
devise solutions. This time the goals will be set for a month as well,
regular tasks should be done by entrepreneur herself. The third visit
will be in a month. The forth in 3 months.
 Start Shakti clubs for entrepreneurs in an area
 Shakti clubs for entrepreneurs in each area having 20-25 women
should be started with monthly meetings. This has a goal of
women sharing their successes and problems concerning sales of
HLL. Good case practices should be shared as well as solutions to
problems.
SOLUTIONS & RECOMMENDATIONS (CONTINUED 2)
 Start an on-place market in every target village
 Shakti entrepreneurs will set a small market place within the village and sell goods
from it with the regular intervals, depending on the number of villages in the area
of that entrepreneur (ex. every Mon or every other Mon). (Since so far Shakti
entrepreneurs are not eager to use door-to-door system)
 Create an interactive communication entrepreneur social network through
iShakti, which would give information and feedback to the Shakti
entrepreneur
 New communications for rural residents:
 use local gatherings as promotion possibilities organically (ex. Gifts to the
newlyweds in HLL products at weddings, as well as free samples)
 Distribute free samples through Vani
 Development of Shakti social initiatives
 Optimize the iShakti project by using external funding (commonly with NGOs and
Government). iShakti should be sponsored by government and NGOs for 95-97%
 Vani: the communicators should be volunteers from local NGOs. No commercial
communication will be done through them. Vani will give out for free small amounts of
HLL products. (Not to disturb the sales channels)
 More than 50% of CSR budget of HLL should be appointed to the women rights
equality programs in northern states
Shakti Project Management Chain Structure

General Shakti Sales Manager

Regional Sales Manager (RSM) 1 RSM 2 RSM 3 RSN 4

Area Sales Manager (ASM) 1 ASM 2 ASM 2 ASM 3

Sales Officer 1 SO 2 SO3 SO 4 SO 5 SO 6

Territory Sales in –charge (TSI): 11 TSIs per Sales Officer

+ each Sales Officer has 1 personal supply assistant

Shakti Entrepreneur Clubs (SEC): 4 SECs per Territory Sales in-charge

Shakti Entrepreneurs (SE): 25 SE per Entrepreneur Club

(covering 3-8 villages each)
SUMMARY
SUMMARY

HLL led a tough price wars with some of the competitors. As a

result, profits fell to a 4-year low. HLL found a new niche not
used yet. It was selling to consumers in inaccessible villages
with low business potential, developing the regions as a
result. Project was called Shakti. But after a year it needed to
grow, despite some of the difficulties.
We presented a set of recommendations, that should enable
the project to grow exponentially using intensive as well as
extensive measures. Intensive measures help to grow average
consumption of clientele. Extensive measures help to grow
clientele itself.