UNILEVER IN INDIA- HINDUSTAN LEVER’S PROJECT SHAKTI

Analysis of the case:

Unilever in India - Hindustan Lever's Project Shakti' examines HLL's innovative marketing
strategy that focuses on the rural consumer markets in India. Project Shakti spearheaded in 2001
sought to turn rural housewives into micro-entrepreneurs, as such, these trainees were recruited
to distribute HLL's fast-moving consumer goods to remote villages. The case also discusses the
advantages and disadvantages of rural market expansion given the high logistics costs and
limited access. Such issues have been dealt with by the use of local women, “Village women”,
who were able to sell the products and therefore earn a livelihood, thus enhancing HLL's rural
distribution and brand equity.

This model constrained the deepening of rural penetration, advanced women's economic
independence, and product penetration in difficult markets. This also fostered brand equity
resulting in a competitive advantage to HLL. Nonetheless, the case invokes the question of the
model's scalability and sustainability over time and the over-reliance on one distribution channel,
thus inviting inter-temporal management issues of the firm's growth and applicability in other
emerging markets.

1. What are the key features of Project Shakti? What are its pluses and minuses?

 Rural Markets to Explore: Initially, HLL could reach only 16% of the rural population in the
country which was also an important unexplored area. Project Shakti was conceived as a
means of addressing this challenge by putting together channels that would be able to reach
them in a hundred thousand villages.

 Village women Empowerment Initiative: Non-Governmental Organisations (NGOs) networks

have remapped HLL’s activities by identifying and empowering local women (Village women)
who are recruited from Self-Helping Groups (SHGs) to act as micro-distributors of HLL’s
products such as soaps, shampoos and detergents within their communities. This way HLL
reaches even the last mile distribution of its products, as local and trusted characters do not
require an extensive distribution system.

 Optimum utilisation of SHGs and Micro-Credit Facilities: Every SHG comprises 10-15
women who come together to promote savings and lend among themselves. Through
Project Shakti, HLL fast-tracked the struggle they provided to these entrepreneurs by micro
finance, this was to help them get stocks without a huge cost invest at the beginning.

 iShakti and Vani Projects: To further HLL’s reach and local influence, iShakti kiosks give
villagers access to information on agriculture, healthcare and governance. From the
perspective of marketing HLL products, vanis also include education about hygiene and
personal care through local women, who are trained for this assistant program, called vani.

 Skill Development and Training: Training on sales, financial literacy, and customer relations
is covered under the training program provided to each Shakti entrepreneur. This helps build
their confidence and equips them with business skills, supporting HLL’s goal of sustainable
market expansion through empowered individuals.

Pluses:

 Sustainable Livelihood for Women: Project Shakti provides rural women with the opportunity
to earn a monthly income of INR 500-700, which serves as a dependable, supplementary
 earning source for their families. It is not only an economic activity but it also empowers
women thereby improving their social standing and self-esteem.

 Increased Reach and Market Penetration: HLL's traditional model was not able to cover the
distance most remote villages are from HLL. However, Project Shakti turns this limitation into
an advantage for HLL since they directly reach these community members through people
who already know them.

 Brand Loyalty through Local Influencers: HLL's attempt at strengthening its brand loyalty is
through employing women who are known to the community. Village women provides one-
to-one communication at a personal level while ensuring that these communications are
area-based improving the chances of customers accepting the products and going back to
buy them again.

 Social Impact - Shakti aims at enhancing the quality of life in the regions it operates, with
Vanis, and Village women serving the dual purpose of advertising and educating consumers
on different personal care products enhancing HLL's brand identity.

Minuses:

 Significant Expenses Associated with Training and Sustaining the System: Training costs
present a significant burden, accounting for as much as 10-15% of Shakti's revenue and
over and above operational costs of 3-5% on iShakti and Vani initiatives. These fixed costs
can pose a problem on the issue of scalability, especially when revenue does not grow at a
faster pace than costs.

 Difficulties of Scaling in Different Geographies: Similarly, scaling becomes a challenge for

HLL in India considering there are many languages, different infrastructures, and cultural
orientations. Also, I have noted that some entrepreneurs are not literate and are not very
effective in some areas due to their low self-confidence.
Losing Village women: The dropout of Village women would not only mean loss of training
expenditure but also congestion within the existing local networks, which may increase
recruitment costs and make the operation inefficient.

2. Is Shakti a CSR initiative?

 More Of A Business Strategy With CSR Appendages: Project Shakti is beneficial to society,
but on a larger scale its main focus is to grow the penetration and revenues of HLL in the
rural market which is a business strategy rather than a social one. HLL hopes to increase its
consumers in rural areas by introducing Village women, which is an attempt at generating
income rather than just offering social services.

 CSR Aspects And Social Benefits Of The Strategy: To some extent, Project Shakti also goes
well with CSR principles because it aims to empower rural women by providing them with
employment opportunities and healthcare knowledge through education. These initiatives
are consistent with CSR values since they raise the quality of life in the communities, create
opportunities for backward women, and encourage a more active way of life that extends
beyond HLL's commercial aspirations.

 Strategic CSR For The Benefits Of The Brand In The Long Run: Shakti is also a part of the
wider definition of strategic CSR, a term used to describe the synergistic relationship
between social good and business. Sustaining the goodwill of the community and the
customers, the integration of iShakti kiosks and Vani communicators is well branded
hypnotized coalition of community services cementing the brand reinforcement techniques
 that is how CSR tenets can be utilized to contribute to the overall brand equity of such a
company. CSR in this form is appropriate as it provides an ideal framework that is
advantageous to both napkin HLL and the societies it serves.

3. Does Project Shakti make economic sense?

The project is an economically viably sound and strategic move for HLL, as shown by rural
revenue increase and inexpensive distribution. Project Shakti is estimated to have
contributed more than 15% of HLL's rural turnover within the years of its inception. As of the
year 2011, it had reached more than three million households through 45,000 Village
women serving more than 100,000 villages. The increase in rural turnover shows that the
micro-distribution model of Shakti is able to create a lot of revenue for HLL by attracting
different markets.

The role of Village women in distribution eliminates the supply chain cost of rural market
impediments like the storage of goods or transportation to distant areas. The distribution
method lowers the costs incurred by HLL in penetrating new frontiers in the market, which is
consistent with the low-cost and efficient models discussed in Serving the World's Poor,
Profitably. The strategy of HLL to offer kiosk franchises and low unit prices, LUP packaging,
especially for hair care products are in the shape of sachets helps the rural population afford
products and at the same time increases sales for Shakti women. This low-priced packaging
strategy and high capital turnover result in a high return on capital employed for HLL.

HLL nurtures local leaders who not only have deep knowledge about product usage,
mechanics, benefits, etc but also care about the women in their communities and infuse this
message into the communities. In developing regions, where women must shop at the same
shop for a long period, market loyalty becomes a very critical factor in market retention
among such consumers. The model of Project Shakti makes sure that the end users are not
only familiar but also comfortable with the HLL products, nurturing the sustained growth of
revenues and the market in general.