Description
PROJECT ON VIMBAR
PROJECT ON
VIM BAR
ROLE OF THE RURAL ECONOMY Around 700 million people, or 70% of India's population, live in 6,27,000 villages in rural areas. 0% of t!e rural population is "on"entrated in villages #it! a population of less t!an 2000. $!e rural India offers a tremendous mar%et potential. A mere one per"ent in"rease in India&s rural in"ome translates to a mind'(oggling Rs )0,000 "rore of (u*ing po#er. +earl* t#o't!irds of all middle'in"ome !ouse!olds in t!e "ountr* are in rural India. And "lose to !alf of India&s (u*ing potential lies in its villages. $!us for t!e "ountr*&s mar%eters, small and (ig, rural rea"! is on t!e rise and is fast (e"oming t!eir most important route to gro#t!. Reali,ing t!is -orporate India is no# investing a si,ea(le "!un% of its mar%eting (udget to target t!e rural "onsumers. Rural India a""ounts for over 70 per "ent of t!e "ountr*&s population. .it! ur(an mar%ets saturated for most "ategories, it !as (e"ome imperative for all
pla*ers to in"rease t!eir penetration levels in rural mar%ets. $!ere !as (een a rapid e/pansion of t!e "onsumer ma0ors& distri(ution net#or%s into t!e rural regions. -ompanies li%e 122 and -olgate'3almolive 4-'35 !ave made sustained efforts t!roug! various programmes li%e 67peration B!arat& 41225 and 67peration 8agruti& 4-'35 to ma%e inroads into t!e rural e"onom*, in order to drive gro#t!. 9or t!e past t!ree or four *ears, t!e (ottom lines of most of t!e "ompanies !ave improved due, on t!e one !and, to redu"ed e/"ise duties and, on t!e ot!er, to de"lining "ommodit* and ra# material pri"es. Besides, "ompanies introdu"ed "ost rationali,ation measures, #!i"! !elped t!em improve t!eir operating margins. Reasona(l* !ig! operating margins are ne"essar*, in order to sustain t!e !ig! ad'spends. 1o#ever, sta(ili,ed "ommodit* pri"es ma* put pressure on t!e margins in t!e future. .it! in"reasing "ompetition, t!e pla*ers !ave !ad to a(sor( a lot of pri"e "uts to (oost volumes. In t!e past one *ear, !o#ever, t!e industr* !as (een reeling under a demand "run"!.
RURAL CONSUMER’S AND INDUSTRY’S PROFILE • $!e "onsumer produ"t se"tor mainl* "onsists of personal "are, "osmeti"s and !ome produ"ts segments. $!e se"tor "an (e furt!er su(' divided into dental "are produ"ts, soaps, detergents, surfa"e "leaning produ"ts, s%in "are, and !air "are produ"ts.
• India's rural mar%ets !ave seen a lot of a"tivit* in t!e last fe# *ears. :in"e ur(an mar%ets are saturated in most "ategories, future gro#t! "an "ome onl* from deeper rural penetration. 9M-; ma0ors are aggressivel* loo%ing at rural India sin"e it a""ounts for 70% of t!e total Indian !ouse!olds.
• $!e industr* is volume driven and is "!ara"teri,ed (* lo# margins. $!e produ"ts are (randed and (a"%ed (* mar%eting, !eav* advertising, sli"% pa"%aging and strong distri(ution net#or%s.
• <espite t!e strong presen"e of M+- pla*ers, t!e unorganised se"tor !as a signifi"ant presen"e in t!is industr*.
• Brand (uilding and e/tensive distri(ution net#or% is a %e* fa"tor. A su""essful (rand is a pre"ious asset, #!i"! "ould fet"! a pri"e man* times t!e "ost of assets re=uired to ma%e t!e produ"t. A stud* "ondu"ted (* A>M'7R;'MAR; refle"ts t!at t!e s!are of (randed goods is !ig! for a num(er of dail* used produ"ts. Branded goods "omprise of 6?% of sales in villages and t!e s!are of non'(randed produ"ts is s!rin%ing dramati"all*.
Personal Care & Home Products market $!e si,e of t!e Indian fast'moving "onsumer goods 49M-;5 se"tor is "lose to Rs 600 (n. $!e nort!ern and t!e #estern regions of t!e "ountr* a""ount for more t!an !alf of t!e mar%et for "onsumer goods. Barring t!e fastest' gro#ing personal "are segment, no ot!er produ"t segment !as seen t!e entr* of so man* pla*ers. In t!e past de"ade, t!e personal "are industr* !as #itnessed a "onsumer (oom. $!is !as (een due to li(erali,ation, ur(ani,ation, and an in"rease in t!e disposa(le in"omes, and altered lifest*les, espe"iall* a !eig!tened level of a#areness among t!e rural "ommunit*, "onse=uent to t!e onslaug!t of satellite television. 9urt!ermore, t!e (oom !as also (een fuelled (* t!e redu"tion of e/"ise duties, dereservation from t!e small's"ale se"tor and t!e "on"erted efforts of personal "are "ompanies to #oo t!e (urgeoning affluent segment of t!e middle "lass t!roug! produ"t and pa"%aging innovations.
@nli%e in t!e past, #!en domesti" "ompanies #ere not per"eived as "ompetitive vis'A'vis multinational "orporations 4M+-s5, t!e s"enario is graduall* "!anging, #it! some domesti" "ompanies, li%e +irma Mari"o and 8*ot!i 2a(s, standing up to t!eir M+- "ounterparts. Also, "ompetition amongst t!e M+-s !as intensified, leading to s!rin%age of margins. $!e personal and !ome "are segment !as ver* lo# entr* (arriers of te"!nolog* and "apital re=uirements. $!is attra"ts ne# pla*ers and !as resulted in intensif*ing "ompetition. <espite t!is, t!e strong distri(ution net#or%s and !eav* investments needed for (rand (uilding remain %e* deterrents to ne# pla*ers.
2o# margins and !ig! volumes "!ara"teri,e t!e industr*. .!ile t!e level of disposa(le in"omes determines t!e overall se"tor gro#t!, t!e mar%et !as alread* (een segmented and su('segmented. -ompanies !ave laun"!ed produ"ts at a num(er of pri"e points to drive up volumes. +e# produ"ts are (eing laun"!ed in ni"!e segments, and old produ"ts re'laun"!ed. Brand e=uit* drives t!e "ustomer&s pur"!ase de"isions, and is t!e %e* to gaining mar%et s!are. Also, "ompetitive pressures !ave !i%ed t!e advertising (udgets of most pla*ers. Besides, a profusion of promotional s"!emes are (eing offered. Most pla*ers, in"luding 1industan 2ever 2td 41225, are struggling to maintain top line gro#t!, despite t!e !eav* advertising and salespromotion 4A:35 e/penditure. A lo#er pri"e differential (et#een t!e organi,ed and t!e unorgani,ed se"tors from redu"ing e/"ise duties allo#s t!e former to gro# at t!e e/pense of t!e latter. $!e organi,ed se"tor also !as a superior distri(ution rea"!. Alt!oug! most of t!e produ"t "ategories are still in t!e gro#t! p!ase, a fe# (road "ategories, li%e detergents, !ave rea"!ed a mature p!ase onl* in t!e ur(an
mar%et. A""ording to industr* sour"es, t!e affluent segment in t!e rural se"tor is gro#ing at a faster rate t!an t!e ur(an one. 9or t!e past t!ree *ears, t!e organi,ed se"tor !as (een fo"using on t!e rural mar%ets, #!i"! are per"eived to drive gro#t! in t!e industr* and #!i"!, to a ver* large e/tent, are dominated (* unorgani,ed pla*ers
Penetration Le els in rural area $!e personal and !ome "are mar%et is a mature one in ur(an.1o#ever, for t!e past t!ree *ears, it is #itnessing a lot of "!anges, in terms of produ"t and usage patterns. 3rodu"ts in t!e soap, detergent and !air oils "ategories !ave !ig! penetration level 4over 70 per "ent5. $!e value gro#t! is mainl* t!roug! !ig!er reali,ations and improvements in t!e produ"t mi/. $!e popular and e"onom* segments "urrentl* dominate most of t!e produ"t "ategories. .it! an in"rease in disposa(le in"omes, t!e preferen"es of t!e target mar%et #ould s!ift to t!e premium produ"ts. 9or produ"ts in t!e !air oil and dental "are mar%et, t!e t!rust of t!e organi,ed se"tor is to "onvert users of non'(randed produ"ts to (randed ones.
$!e premium produ"t "ategories li%e s!ampoos, s%in "are and "osmeti"s "ontinue to !ave lo# penetration levels even in t!e ur(an areas and !ave a"!ieved volume gro#t! t!roug! pa"%aging innovations and value gro#t! t!roug! in"reased reali,ations. In t!e s!ampoo segment, sa"!et pa"%s, #!i"! "ontri(ute to over B0 per "ent of revenues, !ave (een su""essfull* used to (rea% t!e pri"e (arrier and !ave offered "onvenien"e and afforda(ilit*. In t!e produ"t "ategories of mos=uito repellents, #!ere "onsumption is di"tated (* need, and s!aving (lades, #!i"! !as lo# penetration levels, entr* (arriers are relativel* !ig!. 7nl* pla*ers #it! strong (rands "an pass on "ost in"reases
Prudent in !ricin" # rural consumersC $!e Indian "onsumer is ver* pri"e sensitive. In t!e personal "are se"tor, (randing allo#s "ompanies to partiall* pass on t!e "ost in"reases to t!e "ustomers. Most pla*ers !ave introdu"ed produ"ts #it! mass'mar%et pri"ing, so as to (uild volumes. $!e in"reased promotional a"tivit* t!at is ta%ing pla"e amongst pla*ers !as relegated (rand lo*alt* to t!e (a"%seat. Moreover, t!e in"reased "ompetition !as restri"ted not onl* gro#t! rates, (ut also t!e a(ilit* to a(sor( fre=uent pri"e in"reases, t!us (enefiting t!e "onsumer. .it! t!e rise in disposa(le in"omes of "onsumers, pla*ers in t!e premium'produ"t "ategories #ill (e a(le to in"rease volumes. $!e pla*ers in t!e personal "are industr* derive t!eir strengt! from !ig! "apital turnover, strong (rand e=uit* and effe"tive management of distri(ution logisti"s. $!e strengt! of t!e distri(ution rea"! is a %e* element in (uilding a su""essful (rand and !elping it garner volumes t!roug! in"reased penetration levels. +o#ada*s, "ompanies #it! strong distri(ution
net#or%s are using t!em su""essfull* to distri(ute ot!er "ompanies' produ"ts as, for instan"e, Mari"o's distri(ution agreement #it! 3>;, to distri(ute its (rands 4Ariel (ar, -ama*
ap, 3ampers diapers, 7ld 
i"e5 for a fee. :u"! arrangements #ill ena(le ne#er pla*ers to penetrate t!e mar%ets #it!out !aving to set up t!eir o#n distri(ution net#or%s. 1o#ever, a strong distri(ution net#or% "an onl* su""eed #!en used in tandem #it! t!e rig!t pa"%aging and pri"ing. In t!e pri"e'sensitive rural e"onom*, "ompanies !ave to "onstantl* laun"! value'for'mone* produ"ts t!at satisf* t!e needs of t!e rural "onsumer. $!is !as (roug!t a(out t!e mini' pa"% revolution, #!i"! !as (e"ome "ommon a"ross all produ"t "ategories. Brands li%e Ariel, :urf, -olgate, :unsil%, 3antene, et". are no# availa(le in sa"!ets and pou"!es at ver* lo# unit pri"es t!at "an indu"e trials and pus! "onsumption levels. Brea%ing t!e pri"e (arrier !as (e"ome t!e %e* to drive volumes, espe"iall* for "ompanies li%e 122 and -'3, #!i"! derive almost B?'?0 per "ent of t!eir revenues from t!e rural mar%et.
FMC$ consum!tion in rural areas% 7rgani,ations li%e 1industan 2ever 2td., +irma -!emi"al .or%s, -olgate 3almolive, 3arle foods and Mal!otra Mar%eting !ave "arved inroads into t!e !eart of rural mar%ets. Various "ategories of produ"ts !ave (een a(le to spread t!eir tenta"les deep into t!e rural mar%et and a"!ieved signifi"ant re"ognition in t!e "ountr* !ouse!olds. And, in t!e pro"ess, t!e regional (rands, lo"al (rands and t!e ot!er un(randed offerings got displa"ed (* t!e leading (rands. -ompan* HLL&'(M Nirma C)emical *orks Col"ate Palmoli e Parle Foods Mal)otra marketin" -ategor* 1ouse!old penetration DD% ?6% BB% B)% 27% % volume of lo"al (randsEun(randed
*as)in" cakes+,ars Tea -alt
DD% ?6% BB%
7f t!e e/penditure on "onsumer goods in rural !ouse!old, appro/imatel*, FF% is on food arti"les su"! as (is"uits, tea, "offee and salt, 20% on toiletries, )B% on #as!ing material, )0% on "osmeti"s, F% on 7$produ"ts and % on ot!er "onsuma(les. A num(er of "ategor* produ"ts !ave esta(lis!ed t!emselves firml* in t!e rural !ouse!olds. It is evident t!at in t!e villages lo#'pri"ed (rands are #ell a""epted and one mig!t feel t!at a larger proportion of t!e pur"!ases made in rural mar%et "an (e attri(uted to lo"alE un(randed pla*ers. :urprisingl*, !o#ever, t!e un(randedElo"al "omponent "ontri(utes to a su(stantial portion of t!e volume of onl* a fe# of t!e !ig!l* penetrated "ategories.
(ncreasin" ,rand a.areness amon" rural consumers% In t!e rural families, studies indi"ate a slo# (ut determined s!ift in t!e use of "ategories. $!ere is a remar%a(le improvement in t!e form of produ"ts used. 9or instan"e, !ouse!olds are upgrading from indigenous teet!'"leaning ingredients to toot! po#der and toot!pastes, from traditional mos=uito repellant to "oils and mats. $!ere is also a visi(le s!ift from lo"al and un(randed produ"ts to national (rands. 9rom lo#'pri"ed (rands to premium (rands.
About HLL
122 !as over B6,000 emplo*ees, and !as "reated 2 la%!s indire"t 0o(s. Its operations are spread a"ross 70 lo"ations in India. $!ere are over ?0 fa"tories, of #!i"! 2D are in (a"%#ard areas. $!e operations involve 2000 suppliers and asso"iates and 7000 sto"%ists and agents. 122 !as emerged as a ma0or G/porter.
Cor!orate Pro/ile 122, a ?).6% su(sidiar* of @nilever 3l", is t!e largest 9M-; -ompan* in t!e "ountr*, #it! a turnover of Rs. ))D (n. $!e "ompan*&s (usiness spra#ls from personal and !ouse!old "are produ"ts to foods, (everages and spe"ialt*
"!emi"als. $!e "ompan* !as a dominating mar%et s!are in most "ategories t!at it operates in su"! as toilet soaps, deter"ents, s%in"are, !air "are, "olor "osmeti"s, et". It is also t!e leading pla*er in food produ"ts su"! as pa"%aged tea, "offee, i"e "ream and ot!er "ulinar* produ"ts. Market -)are 122 gre# at a fast pa"e in t!e mid 90’s driven (* its aggressive a"=uisition spree. 9rom Rs. BD (n turnover 4"ontri(uted 70% (* soaps, detergents and personal produ"ts5, 122&s turnover !as no# gro#n to Rs. ))D (n, #it! soaps and personal produ"ts "ontri(uting ?7% to turnover and (everages and food produ"ts "ontri(uting to 2 % of turnover. ;ro#t! during t!e last fe# *ears !as largel* (een driven (* t!e personal produ"ts (usiness. 1o#ever t!e pa"e of gro#t! !as sla"%ened signifi"antl* in t!e last t#o *ears #it! several %e* segments registering a degro#t! in 200).
Market Capitalisation - HLL
60% HLL Other Brands 40%
Gven as 1industan 2ever is armed #it! t#o (rands '' +i!ar and -o"o"are '' positioned to ta%e on 3ara"!ute, t!e "lear strateg* adopted (* 122 is to atta"% 3ara"!ute indire"tl* (* targeting t!e loose oil "onsumer.
122's overall s!are in t!e Rs ?00'"rore "o"onut !air oil mar%et is a(out 2F %. Mari"o leads #it! a ?B % s!are. 122's +i!ar !as appre"iated its mar%et s!are to )7.2 % in Ma* 2000, from )2 % in end') , as per 7R;'Marg All'India retail audit. $!e (rand's s!are in t!e (eginning of ) stood at .? %.
Per orm!"#e o HLL i" $00% $urnover for t!e *ear in"reased (* B.F2 % gross and B.F7 % net. Produ#t C!te&ories' So!( !"d Deter&e"t $!e overall mar%et gro#t! forap > <etergent #as sluggis! during t!e *ear #it! a s!arp de"line in t!e 3opular > 3remium segment of t!e mar%et. In parti"ular, rural mar%et #!ere t!e (usiness !ad a traditionall* strong presen"e performed poorl* follo#ing de"line in t!e agri"ultural gro#t!. $!e dis"ount segment "ontinued to fa"e severe pri"e led "ompetition. Against t!is (a"%ground, t!e (usiness registered a relativel* (etter performan"e in term of gro#t!. Ma0or investment #ere made (e!ind =ualit* en!an"ement of %e* (rand li%e vim, 2u/, :urf and .!eel during t!e *ear #it! "lear
"onsumer (enefit. $!ese #ere (a"%ed (* some strong "onsumer promotion during t!e *ear in"luding multi pa"%. 2ife(uo* A"tive #as laun"!ed during t!e *ear and in s!ort time, t!e (rand gre# !andsomel* #it! a B.7 % s!are of t!e segment. $!is !elped offset t!e de"line of 2ife(uo* -ar(oli". Ma0or investment !ad (een planned to retain and gro# t!e 2ife(uo* fran"!ise in 2002. 7verall, 3o#er Brand gre# signifi"antl* a!ead of t!e mar%et and are poised #ell for a strong performan"e on"e t!e mar%et turn around #it! t!e impending e"onomi" revival. Innovation #ill "ontinue to drive gro#t! in t!e follo#ing *ear, #it! several pro0e"ts in t!e pipeline. Ma0or initiative to improve distri(ution rea"!, parti"ularl* in t!e rural mar%et, #ere underta%en during t!e *ear to (uild upon t!e "ompetitive advantage t!at t!e (usiness "urrentl* !old in sales and distri(ution. :ignifi"ant investment #ere also made in net#or%ing and Information $e"!nolog* I$ to manage suppl* "!ain more effi"ientl* and ma%e a =uantum improvement in t!e "ustomer servi"e level. 3ro0e"t 2GA3 #!i"! (ring toget!er t!e "om(ined strengt! of I$, :ales and -ommer"ial to deliver (etter "ustomer servi"e and ma%e t!e entire suppl* "!ain in"luding t!e (a"% end s*stem "onne"ted #it! supplier of material respond faster to t!e s!ort term "!ange in t!e mar%et pla"e, !ad (een implemented to#ard t!e end of t!e *ear in t!eap Business and t!e initial result #ere en"ouraging. $!e
fo"us in 2002 #ill (e to sta(ili,e t!e s*stem and prepare for rolling it out to ot!er (usinesses. A fe# !ig!lig!t of t!e 200) (rand performan"e areC • .it! .!eel and Rin, t!e (usiness not onl* re"orded (rand leaders!ip again after a de"ade (ut also "aptured +o 2 in 2aundr*. • 2u/ re"orded it !ig!est ever s!are in t!e last 2F mont!. • .!eel ;reen 3o#der s!are are at t!eir !ig!est in 2F mont!. • :urf G/"el !ad re"orded it !ig!est value s!are ever.
• $!e (usiness also "reated ne# (en"!mar% in "apa"it* "reation #it! F ne# plants 2 for +:< Bar, ) forap for +:< 3o#der (eing "ommissioned in re"ord time. $!ese fa"tories !ad sta(ilised ver* =ui"%l* giving signifi"ant suppl* "!ain and ta/ (enefit to t!e (usiness. • :uperior $e"!nolog* in t!e (usiness repertoire #ill (e leveraged to deliver improved =ualit* at lo#er "ost to a"!ieve profita(le gro#t!. $!e Business sees a (ig opportunit* in mar%et gro#t! in t!e medium to long term, parti"ularl* in t!e rural area, and !ad initiated programme to drive "onsumption of soap in t!e "onte/t of t!e in"reased a#areness of !ealt! and !*giene. 9or t!e *ear 2002, mar%et gro#t!, #!i"! is lin%ed to t!e turnaround of t!e e"onom*, remains t!e ma0or ris% fa"tor.
Perso"!) Produ#t' 3ersonal 3rodu"t !ad led a good *ear in 200), #it! dou(le'digit gro#t!. $!is #as a"!ieved (* fo"using on t!e "ore (rand and investing in (uilding t!eir e=uit*. In spite of slo# mar%et gro#t!, *our -ompan* in"reased it investment in innovation, resear"! and advertising on it (ig (rand resulting in gro#t! a!ead of t!e mar%et. $!e 1air -ategor* !ad anot!er *ear of gro#t!, #it! !ig! =ualit* relaun"!es of -lini" 3lus, -lini" All -lear (ottle #ere "!anged in line #it! international development, #!ile a ne# stand up pa"% #as laun"!ed in t!e mid pri"e segment. Hour -ompan* entered t!e nas"ent "ategor* of !air "olourant, #it! t!e laun"! of :unsil% !air "olour in t!e metro. In order to address t!e
opportunit* at t!e lo# pri"e end of sa"!et, 2u/ sa"!et #ere laun"!ed at pri"e of Re) and Re0.?0, and t!ese !ad met e/pe"tation. $!e :%in"are -ategor* !ad a ver* good *ear, #it! 9air > 2ovel* as star performer in 200). In 9air > 2ovel*, t!e laun"!es in 200) in"luded a fairness soap, a dar% "ir"le under e*e "ream, and sa"!et #it! a re"losea(le "ap. $!e main 9air > 2ovel* "ream (rand #as also relaun"!ed #it! improved pa"%aging and "ommuni"ation. All t!ese initiative, along #it!
investment in advertising and rural penetration, led to !ig! gro#t! for t!e fran"!ise t!roug! t!e *ear. $!e 3ond (rand returned to dou(le'digit gro#t! after a slo#do#n for 2 *ear, #it! "ompre!ensive relaun"!es to it tal" as #ell as s%in"are range. $!e gro#t! #as a"!ieved (* improvement in t!e fun"tionall* of produ"t, pa"%aging and impa"tful mar%et a"tivit*. A ne# tal" variant, pond 2ig!t n 9res!, and a ne# mini -lod -ream 0ar pri"ed at Rs? #ere su""essfull* laun"!ed in 200). $!e s%in range of 2a%me #as renovated and strengt!ened and a premium ne# produ"t, 2a%me 9air 3erfe"t, #as introdu"ed to#ard t!e end of 200). In t!e 7ral -ategor*, 3epsodent #as relaun"!ed and emerged mu"! stronger in 200) as a result of innovation, advertising and mar%etpla"e a"tivation. $!e introdu"tion of value pa"% as #ell as ne# advertising !elped in"rease mar%et s!are of 3epsodent. Hour -ompan* de"ided to deprioriti,e t!e toot!paste (rand Aim, in order to fo"us all effort on 3epsodent and -lose @p t!is strateg* !ad (een su""essful as demonstrated (* t!e gro#t! and (rand (uilding t!at !ad (een a"!ieved in t!e se"ond !alf of 200). In t!e <eodorant (usiness, A/e "ontinued on a !ig! gro#t! plan, #it! man* imaginative mar%et a"tivities and ne# introdu"tion in 200). Re/ona #as relaun"!ed #it! international pa"%aging and !ad a"!ieved salien"e on t!e 2F !ours deliver* of deo (enefit.
-olour "osmeti"s sa# man* innovation on (ot! 2a%me and Glle )D in"luding a ne# range of "olour (ased on t!e 2a%me India 9as!ion .ee%. 122 a"=uired t!e asset and lia(ilities of it "olour "osmeti"s, fragran"es and personal "are (usiness from 2a%me 2ever 2td at net (oo% value, #it! effe"t from B)EBE200). 3ost merger, Avian"e (usiness "ontinued to fo"us on dire"t mar%eting of personal "are produ"t to gain (etter understanding of t!is "!annel .
:uppl* "!ain and souring effi"ien"ies led to signifi"ant "ost redu"tion, #!ilst =ualit* improvement "ame t!roug! te"!nologies and innovation. Hour -ompan* "ontinues to fo"us on lo# unit pri"e pa"%, #!i"! provide t!e "onsumer #it! =ualit* produ"t at lo# put do#n pri"e. A ne# 3ersonal 3rodu"t fa"tor* #as "ommissioned in <oom <ooma in Assam, to "ater to t!e gro#ing mar%et demand. to ot!er (usinesses.
Product&0 im1 HLL 02)ar 2)ar ka mo) tod 3a.a,1
In )
B Vim Bar #as laun"!ed. $!is produ"t !ad man* (enefits in"luding (etter "lean, ease of !andling and eas* storage. Vim Bar #as re'laun"!ed in ) 7 #it! an improved formulation and ne#
"ommuni"ation, #!i"! ta"%led e"onom* and performan"e. Mu"! appre"iated (* t!e mass mar%et, it resulted in "onversions not 0ust from po#der users, (ut also from pro/* users #!o did not upgrade to po#ders (ut preferred to use Vim Bar instead. Vim <is!#as! Bar is t!e mar%et leader #it! 60 per "ent s!are in t!e Rs F00 "rore (randed dis!#as! mar%et $!e (rand !as gro#n signifi"antl* registering strong dou(le'digit gro#t!s in (ot! volume and value terms. Vim Bar #as relaun"!ed a se"ond time in 2002, #it! a uni=ue I:tain -utterJ formulation t!at removes t!e toug!est stains su"! as (urnt mil% and g!ee stains. $!is ne# formulation evolved t!roug! resear"! and is no# setting (en"!mar%s in toug! stain removal. +e# Vim offers t!e "onsumer a superior performan"e at a great value. . +e# Vim #it! its "ontemporar* pa"%aging illustrates d*namism and s#ift stain "utting po#ers. 122 is fo"used on resear"! and development for "onsistent deliver* of superior produ"ts. $!us, +e# Vim !as (een developed #it! a uni=ue stain'"utter formulation t!at removes t!e toug!est stains su"! as (urnt mil% and g!ee stains. +e# Vim offers t!e "onsumer a superior performan"e at a great valueJ. $!e ne# Vim !as a totall* ne# mi/, rig!t from t!e pa"%aging to t!e formulation of t!e produ"t. +e# Vim #it! improved formulation t!at solves t!e !ouse#ife&s *et unsolved pro(lem of toug! stain removal of (urnt mil%Eg!ee stain.
.
Vim is t!e mar%et leader in t!e dis!#as! "ategor*. $oda* Vim is availa(le in po#der, (ar and li=uid form. Vim "ontinuousl* strives to innovate its produ"ts to en!an"e t!e lives of its "onsumers. .!et!er it (e t!roug! its ne# ':tain -utter' formula in its Vim Bar or it's t!e stain (usters in its po#ders, Vim stands for t!e (est =ualit* in dis!#as! produ"ts. 'im as a 4rand
Vim, among 1industan 2ever's B0 po#er (rands, is loo%ing at s"ouring t!e "ompetition furt!er. $!oug! t!e (rand K led (* t!e flags!ip Vim (ar K remains t!e mar%et leader in t!e overall Rs ),000'"rore dis!#as!ing mar%et, 122 L"omplete %it"!en "leaner' Vim 4utensil "leaner5, #!i"! is ran%ed t!e fourt! most preferred (rand in ur(an mar%et, doesn&t find a pla"e in t!e top ten in t!e rural mar%et 7n (rand e=uit* ran%ing. $!oug! it #as a mar%et leader Vim <is!#as! Bar is t!e mar%et leader #it! 60 per "ent s!are in t!e Rs F00 "rore (randed dis!#as! mar%et $!e (rand !as gro#n signifi"antl* registering strong dou(le'digit gro#t!s in (ot! volume and value terms Hll !lanned /or ,rand e5tension Anot!er (rand e/tension #as planned is t!at of an Lappli"ator', to (e pri"ed at parit* #it! n*lon s"ru((ers. -urrentl*, :"ot"!(rite is t!e onl* (randed appli"ator in t!e mar%et, pri"ed at a premium. 122 !as pro0e"ted a Rs 260'"rore turnover for Vim t!is *ear, #!i"! translates to a 2) per "ent gro#t! over t!e previous *ear. Vim (ar, #!i"! a""ounts for over t!ree'fourt!s of t!e Vim (rand's sales, is e/pe"ted to (e t!e %e* driver of gro#t!. M7f t!e pro0e"ted Rs 260 "rore, #e e/pe"t Vim (ar to (e a Rs 2F0'"rore (rand (* t!e *ear'end, #it! Vim detergent po#der and Vim li=uid a""ounting for t!e remaining Rs 20 "rore,M t!e offi"ial sa Vim li=uid, mean#!ile, #ould "ontinue to (e a slo#(urn (rand.
Vim also planned to e/tend t!e (rand (* introdu"ing <etergent li=uids . detergent li=uids is a small, t!oug! emerging mar%et and !as a limited presen"e of (rands su"! as Vim, $eepol and 3ril. $!e mar%et is estimated at 600 tonnes, or roug!l* Rs 200 "rore. Vim li=uid #as rolled out re"entl* in "ities and to#ns #it! )0'la%!'plus population. Market -i6e%
$!e total si,e of t!e dis! #as! mar%et, estimated at Rs),000'"rore, re"orded a F0 per "ent gro#t! over last *ear. 7ver 60 per "ent of t!e mar%et is dominated (* (ars, #!ile dis! #as! po#ders a""ounts for B2 per "ent. $!e penetration levels are, !o#ever, still ver* lo#. Gstimates s!o# t!at nearl* ?0 per "ent of t!e ur(an population and D0 per "ent of t!e rural one still use pro/* produ"ts li%e as! and ot!er "!eap detergents for dis!#as!ing purposes. 122 is t!e leading pla*er, #it! its Vim Bar. MAR2ET -HARE% 7f t!e overall Rs ),000'"rore dis#as!ing mar%et, t!e (randed se"tor a""ounts for Rs F00 "rore. A""ording to A- +ielsen data, #it!in t!e dis!#as!ing (ar segment, Vim's mar%et s!are is estimated at D2 per "ent s!are. Com!etitors $!e (rand fa"es toug! "ompetition from +irma 4in t!e +ort! and .est5, 7dopi" 4in t!e .est5 and :a(ena 4in t!eut!5 it #as t!e strongest in ma!aras!tra.
Marketin" strate"7 ada!ted ,7 HLL $!e "ompan* !anded over t!e mar%eting for vim to 7>M in Maharashtra and Andhrapradesh .7>M rural mar%eters adopted uni=ue strateg* in t!e initial stages to mar%et t!e produ"t in rural areas Ma!aras!ta and And!raprades!. As t!e mar%eters %ne# t!at it #as t!e initial stage in rural areas and to provide a ni"!e in t!e rural mar%ets #as diffi"ult as t!e produ"t itself #as not availa(le in t!is areas.
9irst to target t!e mar%et in rural areas t!e* sa# to it t!at t!e mar%et #!i"! t!e* are targeting #as in t!e 2 to B %m range from t!e !ig!#a*s (e"ause t!e* %ne# it #ont "reate sense to mar%et t!e produ"t in t!ose areas #!i"! are a#a* from t!e !ig! #a*s as t!e produ"t #as not availa(le in t!ose areas. $!e overall mar%eting #as (ased on distri"t'to'distri"t level. $!e* !ad t!oug!t to enter in ot!er areas (e*ond t!e 2toB%m range after ma%ing t!e produ"t availa(le to t!e initial targeted mar%et. t!at it (e"omes eas* for t!e mar%eters to introdu"e, as t!e produ"t #as availa(le in t!e neig!(oring villages and t!e produ"t (e"omes familiar to t!e people. Marketin" se"mentation $!e mar%et segmentation #as in t!ose areas #as done on t!e (asis of t!e !ouses t!at t!e people #ere living into. As t!e people in rural villages lived in different t*pes of !ouses. $!e t*pe of t!e !ouses t!e* lived #ere kaccha ghar, kaccha-pukka, pukka ghar t!e mar%eters also surve*ed t!e per "apita in"ome of individual in rural areas.
C)allen"e )5 $!e "!allenge for mar%eters #as to "onvin"e t!e rural "onsumer and as% t!em to spend mone* on a produ"t #!ere t!e* use to spend no mone* on a parti"ular produ"t. As t!e "onsumer used pro/* produ"ts to "lean t!eir vessels, #!i"! #as availa(le to t!em at, free of "ost. $!e real "!allenge #as to transform t!e prospe"t to t!e "onsumer of t!e produ"t.
25 $!e ot!er "!allenge #as to "ommuni"ate to t!e rural people. It #as diffi"ult for t!e mar%eters to "ommuni"ate to t!e rural people unless t!e* #ere "ommuni"ated in t!eir o#n regional or lo"al language of t!e rural "onsumer. B5 After t!e surve* done it #as found t!at t!e rural "onsumer used aluminum vessel to "oo% t!eir food t!is made t!e "ompan* to "!ange t!eir entire "ommuni"ation. Garlier t!e "ompan* use to "ommuni"ates as, Iap%a "!e!ra (!i de%!a ga safJ. +o# seeing t!at t!e rural "onsumers #ere using aluminum vessel. It #as a "!allenge for t!e mar%eters to appeal and "ommuni"ate t!e produ"t to t!e rural "onsumer and as it #ont (e sensi(le to "ommuni"ate t!em #it! t!e same "ommuni"ation or (ase line. $o "ome #it! ne# "ommuni"ation or tag line #!i"! t!e rural "onsumer "an relate #it! t!eir usage and (e!avioral pattern.
Tar"et consumer $arget "onsumer for IvimJ #ere ? 1ouse!olds #ives ? Restaurants ? :!ops and !otel t!at offer "oo%ed food produ"ts
Ad ertisement% 122 to advertise t!e vim used (ot! medium of "ommuni"ating t!at formal as #ell as informal. 9ormal advertising #as done t!roug!C )5 +e#spapers and maga,ines 25 $elevision B5 Radio F5 -inema ?5 7utdoor advertisement t!roug!C ? :ign(oards ? .all painting ? 2o"al (us (oards ? 3rodu"t displa* (oards (et#een villages 65 3oint of pur"!ase used #ere a5 :treamers (5 $inplates "5 1angings
Promotion strate"7 $!is strateg* #as used at village to village (asis
@se of audio' video vans
<oor to door mar%eting
Mohalla’s
Retail "onta"t
-entral lo"ation In t!e pro"ess of promoting IvimJ in rural areas. Neeping into mind $!e d*nami"s of rural "onsumer and distri(ution infrastru"ture, t!e mar%eter !ad adopted a different promotion strateg* to promote t!e vim in rural areas. $!e formal media used to "ommuni"ate t!e produ"t #as $.V, radio "inema ,print proportionatel* depending upon t!eir rea"! and t!eir influen"e on rural masses. $!e informal promotion strateg* #as formulated. $!e steps involved to promote t!e produ"t in rural areas. $!e first step #as t!e usage of audio' visual pu(li"it* vans. $!is pu(li"it* vans #ere "overed (* (eautiful (anners, t!is (anners #ere em(ossed #it! t!e produ"t p!otos, t!e (ase or tagline of t!e produ"t and "olorful pi"ture t!at "an attra"t t!e rural "onsumer. $!e audi(le material used #ere a tunes of "urrent film* songs, #!i"! #ere "omposed #it! ne# l*ri"s, t!is l*ri"s gave t!e spe"ial features a(out t!e vim. $!is step #as used as an introdu"tion of t!e produ"t vim in rural mar%ets. $!e se"ond step in t!e promotion strateg* #as to do <oor'to'door mar%eting. $!is step #as ver* #ell designed. $o do <oor' to' door mar%eting t!e mar%eter emplo*ed t!e *oung lo"al *out!s #!o "an
"ommuni"ate #it! rural people in t!e lo"al language. $!is *out! "arried along #it! t!em flip charts as a su(stitute medium to $.V. $!is flipchart "ontained a stor*. $!e stor* used in t!e flip "!art #as a(out t#o female named I NamalaJ and I(imlaJ. G/plaining t!at %amala used vim and (imla used ot!er pro/* produ"t. Namala s!o#ed (imla t!e (enefit of using vim in "ompare to ot!er pro/* produ"t and e/plaining t!e features of t!e produ"t. $!e <oor'to'door mar%eting step #as "omplementar* to ot!er step t!at involved t!e parti"ipation of t!e rural !ouse#ives, #!i"! "ontained games. $!is games #ere strategi"all* designed so as to position t!e produ"t and t!e pri"e of t!e produ"t in t!e minds of "onsumer. $!e games used #ere ?otting t!e rig!t pri"e. ? Mat"! t!e pairs. ? $urn t!e #!eel $!is games #ere used to enti"e t!e people and pull t!em to Imo!allaJ t!e small pla"e (et#een t!e !ouses so as to do mass mar%eting as mu"! as possi(le. $!is all #as done as pro"ess of mass mar%eting.
$!e fourt! step in promotion #as Ret!i) #o"t!#t In t!is step t!e mar%eters gave s"rat"! "oupons to t!e "onsumers #!o "ame to pur"!ased vim #it! in"entive pa"%ages 4i.e. pa"%ages one for t#o5. $!e pri"e given #ere on t!e. $!e pri,es distri(uted to #!om so ever #on #as )2mont!s soaps. 3ri,es #ere distri(uted on t!e spot so to "reate (etter per"eption of t!e "ompan* and produ"t in t!e mind of t!e "onsumer. $!e
same #as made appli"a(le for t!e retailers on t!e (ul% pur"!ase. $!is retailers #ere also given spe"ial dis"ount on t!eir (ul% pur"!ase. $!e final step #as t!at all t!e people #ere invited to t!e #e"tr!) )o#!tio". $!is "entral lo"ation #as usuall* a pla"e #ere all t!e village people assem(led so t!at (e"omes eas* to "ommuni"ate at large to t!e masses. $!e a"tivit* underta%en at t!e "entral lo"ation #as "leaning up t!e s#eet ma%ers vessels, #!i"! #as t!e toug!est to do. It #as "ommuni"ated as 0 -a/ kare mita)ee.ale ki kadai1 $!is e/er"ise of promoting t!e produ"t #as one of t!e (est as #!en it #as proved in front of t!e "onsumer as vim "leaned I t!e mita!ee#ale %i %adaiJ #it!out living an* greasiness. $!e advantages of t!e Vim #ere also s!o#n to t!em. $!e advantages of vim #ere t!at it relieved from t!e !ards!ip of s"ru((ing t!e vessel, #!i"! #as done #it! ease #it! t!e !elp of IvimJ. $!e ot!er advantage #as t!at it #ould "ertainl* save t!eir lot of time, #!i"! "an (e utili,ed effe"tivel* for some ot!er #or%. $!is "reated a "lear per"eption a(out t!e produ"t. $!is pro"ess #as used again and again in "apturing different mar%ets.
T)e ot)er !romotion strate"7 to !romote t)e !roduct Ro!ds*o+s "omprising attra"tivel* designed floats #ill traverse t!e lengt! and (readt! of t!e "ountr* during t!e time span of t!e offer.
$!e #!r"i,!), #!i"! #ill "over !undreds of small to#ns and villages apart from t!e metros and is part of a massive rural promo initiative t!at 122 plans to unleas!. $!e "ompan* even !ad to promoted t!e produ"t in H!!ts - Me)!s of different villages.
To !romote t)e im HLL !lanned to distri,ute "old as !ri6e I+ a (id to promote vim one of its leading dis!#as! soap, Vim ;old Bar, 122 !ad laun"!ed a (elo#'t!e'line advertisement. $!is medium proposes to (ring Vim to t!e rural !ouse!olds via dire"t intera"tion (et#een "ustomer and produ"er. $!is promotional (lit,%rieg a"ross t!e "ountr* in"ludes giving a#a* gold #ort! Rs ? "rore. $!e offer givesO "ustomers stand a "!an"e to #in gold in different denominations (* 0ust s"rat"!ing a "ard re"eived on ever* pur"!ase of a Vim (ar. Ga"! s"rat"! "ard "arries an D'digit num(er. Gver* :unda*, one su"! num(er #ill (e announ"ed onn* Gntertainment $V (et#een D' p.m. and t!is num(er #ill (e valid for t!e entire period of t!e offer. If t!e num(er on t!e s"rat"! "ard of t!e "onsumer mat"!es #it! t!e num(er announ"ed on $V, t!e* #ould (e eligi(le for a F00 gm gold (ar ' t!e #eig!t of t!e Vim (ar in gold. In "ase of fe#er digits mat"!ing, t!e "onsumer stands to #in )00 gm, )0 gm, or ) gm of gold or Rs )00 off on pur"!ase of 122 produ"ts from t!e retailer
Communication Vim Bar !as al#a*s "reated an impa"t in t!e mar%et #it! its pat!'(rea%ing "ommuni"ation. $!e "ommuni"ation !as (een designed to po#erfull*
"ommuni"ate t!e toug! stain removal properties of t!e Vim Bar. 122 "reated a ne# "onsumer lingo for t!e toug! stain pro(lem #it! t!e "ampaign (aseline of Vim (eing t!e IN!ar N!ar %a mo! tod 0a#a(J. 122 !ad to "ompletel* "!ange its "ommuni"ation #!en it entered into rural it !ad to "ompletel* "!anged its "ommuni"ation from t!e previous one t!at #as t!at after "leaning t!e vessel #it! (ar *ou "an see *our fa"4ap%a "!e!ra B!i de%!a ga saf5 to 4%!ar %!ar %a mo! tod 0a#a(5 0ust (e"ause t!e rural "onsumers used aluminum vessels to "oo% t!eir food. It #ont "reate sense to appeal t!em to (u* t!at produ"t t!at did not suit t!eir living. Pricin" Initiall* Vim (ar #as pri"ed at Rs )F for F00 gm. An entr*'level Rs 200'gm Vim (ar pri"ed at R s 7 also e/ists. But #it! t!e laun"! of ne# vim it #as pri"ed at Rs )B for a F00 gms pa"% and Rs 6.?0 for a 200 gms pa"%. But #it! t!eir fora* into t!e rural areas t!e pri"e #as "!anged to RsF for 200gm and Rs7.?0 forF00gm. $!e pri"es #ere revised (* %eeping t!e "onsumer (e!avior, in"ome, and "onsumption pattern of rural people. Packa"in" $!e rural "ustomers are usuall* dail* #age earners and t!e* don&t !ave mont!l* in"omes li%e t!e ones in t!e ur(an areas !ave. t!e pa"%aging #as done in smaller units and lesser'pri"ed pa"%s t!at t!e* "an afford given t!eir %ind of in"ome stream. Anot!er important fa"tor is -onvenien"e. :in"e man* !ouse!olds don&t !ave proper (at!rooms and onl* !ave a #indo# or t!ings li%e t!at to %eep su"! t!ings
$!e pa"%aging of I VIMJ done %eeping in mind t!e rural "!ara"teristi". $!e paper #rapped to vim (ar #as in *ello# "olors s!o#ing t!e (rand name vim and "ontaining t!e pi"ture of lime "learl* to s!o# t!at it got lime
"ontents in it. $!e "olures used are red, *ello# and green. $!is sort of pa"%aging #!at made vim to (e t!e mar%et leader in t!e dis! #as! mar%et . 8istri,ution%
Mot!er depot4 Mot!er depot ->9a&s5 ->9a&s
Ruraldistri(utors distri(utor Rural :u('sto"%iest :u('sto"%iest Retailer Retailers "onsumer -onsumers
122 distri(ution s*stem is t!e (est amongst 9M-; "ompanies. At present, 122's produ"ts, manufa"tured a"ross t!e "ountr*, are distri(uted t!roug! a net#or% of a(out 7,000 redistri(ution sto"%ists "overing a(out one million retail outlets. G/tending availa(ilit* <ata on rural "onsumer (u*ing (e!aviour indi"ates t!at t!e rural retailer influen"es B?% of pur"!ase o""asions. $!erefore, s!eer produ"t availa(ilit* "an determine (rand "!oi"e, volumes and mar%et s!are.
122 used t!e prin"iple of pro0e"t stream line .$!e prin"iple of 3ro0e"t :treamline is to leverage our s"ale and organi,ational s*nerg* to in"rease rea"! in rural mar%ets. $!e pivot of :treamline is t!e Rural <istri(utor 4R<5,
#!o !as)?'20 rural su('sto"%iest atta"!ed to !im. Ga"! of t!ese su(' sto"%iest is lo"ated in a rural mar%et. $!e su('sto"%iest t!en performs t!e role of driving distri(ution. 3ro0e"t :treamline #as "on"eptuali,ed to signifi"antl* en!an"e "ontrol on t!e rural suppl* "!ain t!roug! a net#or% of rural su('sto"%iest, #!o are (ased in t!ese ver* villages. As part of t!e pro0e"t, !ig!er =ualit* servi"ing, in terms of fre=uen"*, "redit and full'line availa(ilit*, #ould (e provided to rural trade. $!ere(*, giving us a su(stantial "ompetitive edge over t!e ne/t de"ade $!e role performed (* t!e Redistri(ution :to"%iest !as also undergone "!anges over t!e *ears. 9inan"ing sto"%s, providing manpo#er, providing servi"e to retailers, implementing promotional a"tivities, e/tending indire"t "overage, reporting sales and sto"% data, s"reening for transit damages are some of t!e fun"tions performed (* t!e R: toda*. $!e R: #as re=uired to provide t!e distri(ution units to t!e "ompan* salesman. $!e R: finan"ed !is sto"%s and provided #are!ousing fa"ilities to store t!em. $!e R: also undertoo% demand stimulation a"tivities on (e!alf of t!e "ompan*.$!e R: #ould (e a(le to provide "ustomer servi"e onl* if !e #as servi"ed #ell. $!is %no#ledge led to t!e esta(lis!ment of t!e M-ompan* <epotsM s*stem. $!is s*stem !elped in transs!ipment, (ul% (rea%ing, and as a sto"% point to minimi,e sto"%'outs at t!e R: level. In t!e re"ent past, a signifi"ant "!ange !as (een t!e repla"ement of t!e -ompan* <epot (* a s*stem of t!ird part* -arr*ing and 9or#arding Agents 4->9As5. $!e ->9As a"t as (uffer sto"%'points to ensure t!at sto"%'outs did not ta%e pla"e. $!e ->9A s*stem !as also resulted in "ost savings in terms of dire"t transportation and redu"ed time lag in deliver*. $!e most important (enefit !as (een improved "ustomer servi"e to t!e R:. -ertain ->9As #ere sele"ted a"ross t!e "ountr* to a"t as mot!er depots. Ga"! of t!em !as a minimum num(er of 8I$ depots atta"!ed for sto"% re=uirements. All (rands and pa"%s re=uired for t!e set of mar%ets #!i"! t!e M< and 8I$s servi"e in a given area are sent to t!e mot!er depot (* all manufa"turing units. $!e 8I$s dra# t!eir re=uirements from t!e M< on a #ee%l* or (i'#ee%l* (asis.
$!e ot!er distri(ution s*stem used #as Pro.e#t S*!/ti and Pro.e#t 0*!r!t . 7ur rural gro#t! engine raises in"omes of rural families (* "!annel intervention t!roug! rural :elf'1elp ;roups 4:1;5, #!i"! operate li%e dire"t'to'!ome distri(utors. $!e model "onsists of groups of 4)?'205 villagers (elo# t!e povert* line 4Rs.7?0 per mont!5 ta%ing mi"ro'"redit from (an%s, and using t!at to (u* our produ"ts, #!i"! t!e* #ill t!en dire"tl* sell to "onsumers. In t!e pro"ess, generating emplo*ment and in"omes for t!emselves, and in"reasing t!e rea"! of our produ"ts.
3R78G-$ 7+ R@RA2 MARNG$I+;
0'(M1
BMI$$G< BH C
AC2NO*LE8$EMENT
It gives me a great pleasure in presenting t!is report on t!e su(0e"t rural mar%eting and ena(les me to get t!e insig!t %no#ledge a(out t!e su(0e"t rural mar%eting I #ould li%e to t!an% 3rof.Nris!namoort* for givin me time to time guidan"e as and #!en re=uired for "ompleting t!is pro0e"t 2astl* I e/press m* gratitude to#ards Mr Ra!ul. Nar#e47>M 7@$RGA-1 <es%5 for providing me #it! t!e information a(out t!e mar%eting a"ivities underta%en for vim in rural areas.
doc_174810235.doc
PROJECT ON VIMBAR
PROJECT ON
VIM BAR
ROLE OF THE RURAL ECONOMY Around 700 million people, or 70% of India's population, live in 6,27,000 villages in rural areas. 0% of t!e rural population is "on"entrated in villages #it! a population of less t!an 2000. $!e rural India offers a tremendous mar%et potential. A mere one per"ent in"rease in India&s rural in"ome translates to a mind'(oggling Rs )0,000 "rore of (u*ing po#er. +earl* t#o't!irds of all middle'in"ome !ouse!olds in t!e "ountr* are in rural India. And "lose to !alf of India&s (u*ing potential lies in its villages. $!us for t!e "ountr*&s mar%eters, small and (ig, rural rea"! is on t!e rise and is fast (e"oming t!eir most important route to gro#t!. Reali,ing t!is -orporate India is no# investing a si,ea(le "!un% of its mar%eting (udget to target t!e rural "onsumers. Rural India a""ounts for over 70 per "ent of t!e "ountr*&s population. .it! ur(an mar%ets saturated for most "ategories, it !as (e"ome imperative for all
pla*ers to in"rease t!eir penetration levels in rural mar%ets. $!ere !as (een a rapid e/pansion of t!e "onsumer ma0ors& distri(ution net#or%s into t!e rural regions. -ompanies li%e 122 and -olgate'3almolive 4-'35 !ave made sustained efforts t!roug! various programmes li%e 67peration B!arat& 41225 and 67peration 8agruti& 4-'35 to ma%e inroads into t!e rural e"onom*, in order to drive gro#t!. 9or t!e past t!ree or four *ears, t!e (ottom lines of most of t!e "ompanies !ave improved due, on t!e one !and, to redu"ed e/"ise duties and, on t!e ot!er, to de"lining "ommodit* and ra# material pri"es. Besides, "ompanies introdu"ed "ost rationali,ation measures, #!i"! !elped t!em improve t!eir operating margins. Reasona(l* !ig! operating margins are ne"essar*, in order to sustain t!e !ig! ad'spends. 1o#ever, sta(ili,ed "ommodit* pri"es ma* put pressure on t!e margins in t!e future. .it! in"reasing "ompetition, t!e pla*ers !ave !ad to a(sor( a lot of pri"e "uts to (oost volumes. In t!e past one *ear, !o#ever, t!e industr* !as (een reeling under a demand "run"!.
RURAL CONSUMER’S AND INDUSTRY’S PROFILE • $!e "onsumer produ"t se"tor mainl* "onsists of personal "are, "osmeti"s and !ome produ"ts segments. $!e se"tor "an (e furt!er su(' divided into dental "are produ"ts, soaps, detergents, surfa"e "leaning produ"ts, s%in "are, and !air "are produ"ts.
• India's rural mar%ets !ave seen a lot of a"tivit* in t!e last fe# *ears. :in"e ur(an mar%ets are saturated in most "ategories, future gro#t! "an "ome onl* from deeper rural penetration. 9M-; ma0ors are aggressivel* loo%ing at rural India sin"e it a""ounts for 70% of t!e total Indian !ouse!olds.
• $!e industr* is volume driven and is "!ara"teri,ed (* lo# margins. $!e produ"ts are (randed and (a"%ed (* mar%eting, !eav* advertising, sli"% pa"%aging and strong distri(ution net#or%s.
• <espite t!e strong presen"e of M+- pla*ers, t!e unorganised se"tor !as a signifi"ant presen"e in t!is industr*.
• Brand (uilding and e/tensive distri(ution net#or% is a %e* fa"tor. A su""essful (rand is a pre"ious asset, #!i"! "ould fet"! a pri"e man* times t!e "ost of assets re=uired to ma%e t!e produ"t. A stud* "ondu"ted (* A>M'7R;'MAR; refle"ts t!at t!e s!are of (randed goods is !ig! for a num(er of dail* used produ"ts. Branded goods "omprise of 6?% of sales in villages and t!e s!are of non'(randed produ"ts is s!rin%ing dramati"all*.
Personal Care & Home Products market $!e si,e of t!e Indian fast'moving "onsumer goods 49M-;5 se"tor is "lose to Rs 600 (n. $!e nort!ern and t!e #estern regions of t!e "ountr* a""ount for more t!an !alf of t!e mar%et for "onsumer goods. Barring t!e fastest' gro#ing personal "are segment, no ot!er produ"t segment !as seen t!e entr* of so man* pla*ers. In t!e past de"ade, t!e personal "are industr* !as #itnessed a "onsumer (oom. $!is !as (een due to li(erali,ation, ur(ani,ation, and an in"rease in t!e disposa(le in"omes, and altered lifest*les, espe"iall* a !eig!tened level of a#areness among t!e rural "ommunit*, "onse=uent to t!e onslaug!t of satellite television. 9urt!ermore, t!e (oom !as also (een fuelled (* t!e redu"tion of e/"ise duties, dereservation from t!e small's"ale se"tor and t!e "on"erted efforts of personal "are "ompanies to #oo t!e (urgeoning affluent segment of t!e middle "lass t!roug! produ"t and pa"%aging innovations.
@nli%e in t!e past, #!en domesti" "ompanies #ere not per"eived as "ompetitive vis'A'vis multinational "orporations 4M+-s5, t!e s"enario is graduall* "!anging, #it! some domesti" "ompanies, li%e +irma Mari"o and 8*ot!i 2a(s, standing up to t!eir M+- "ounterparts. Also, "ompetition amongst t!e M+-s !as intensified, leading to s!rin%age of margins. $!e personal and !ome "are segment !as ver* lo# entr* (arriers of te"!nolog* and "apital re=uirements. $!is attra"ts ne# pla*ers and !as resulted in intensif*ing "ompetition. <espite t!is, t!e strong distri(ution net#or%s and !eav* investments needed for (rand (uilding remain %e* deterrents to ne# pla*ers.
2o# margins and !ig! volumes "!ara"teri,e t!e industr*. .!ile t!e level of disposa(le in"omes determines t!e overall se"tor gro#t!, t!e mar%et !as alread* (een segmented and su('segmented. -ompanies !ave laun"!ed produ"ts at a num(er of pri"e points to drive up volumes. +e# produ"ts are (eing laun"!ed in ni"!e segments, and old produ"ts re'laun"!ed. Brand e=uit* drives t!e "ustomer&s pur"!ase de"isions, and is t!e %e* to gaining mar%et s!are. Also, "ompetitive pressures !ave !i%ed t!e advertising (udgets of most pla*ers. Besides, a profusion of promotional s"!emes are (eing offered. Most pla*ers, in"luding 1industan 2ever 2td 41225, are struggling to maintain top line gro#t!, despite t!e !eav* advertising and salespromotion 4A:35 e/penditure. A lo#er pri"e differential (et#een t!e organi,ed and t!e unorgani,ed se"tors from redu"ing e/"ise duties allo#s t!e former to gro# at t!e e/pense of t!e latter. $!e organi,ed se"tor also !as a superior distri(ution rea"!. Alt!oug! most of t!e produ"t "ategories are still in t!e gro#t! p!ase, a fe# (road "ategories, li%e detergents, !ave rea"!ed a mature p!ase onl* in t!e ur(an
mar%et. A""ording to industr* sour"es, t!e affluent segment in t!e rural se"tor is gro#ing at a faster rate t!an t!e ur(an one. 9or t!e past t!ree *ears, t!e organi,ed se"tor !as (een fo"using on t!e rural mar%ets, #!i"! are per"eived to drive gro#t! in t!e industr* and #!i"!, to a ver* large e/tent, are dominated (* unorgani,ed pla*ers
Penetration Le els in rural area $!e personal and !ome "are mar%et is a mature one in ur(an.1o#ever, for t!e past t!ree *ears, it is #itnessing a lot of "!anges, in terms of produ"t and usage patterns. 3rodu"ts in t!e soap, detergent and !air oils "ategories !ave !ig! penetration level 4over 70 per "ent5. $!e value gro#t! is mainl* t!roug! !ig!er reali,ations and improvements in t!e produ"t mi/. $!e popular and e"onom* segments "urrentl* dominate most of t!e produ"t "ategories. .it! an in"rease in disposa(le in"omes, t!e preferen"es of t!e target mar%et #ould s!ift to t!e premium produ"ts. 9or produ"ts in t!e !air oil and dental "are mar%et, t!e t!rust of t!e organi,ed se"tor is to "onvert users of non'(randed produ"ts to (randed ones.
$!e premium produ"t "ategories li%e s!ampoos, s%in "are and "osmeti"s "ontinue to !ave lo# penetration levels even in t!e ur(an areas and !ave a"!ieved volume gro#t! t!roug! pa"%aging innovations and value gro#t! t!roug! in"reased reali,ations. In t!e s!ampoo segment, sa"!et pa"%s, #!i"! "ontri(ute to over B0 per "ent of revenues, !ave (een su""essfull* used to (rea% t!e pri"e (arrier and !ave offered "onvenien"e and afforda(ilit*. In t!e produ"t "ategories of mos=uito repellents, #!ere "onsumption is di"tated (* need, and s!aving (lades, #!i"! !as lo# penetration levels, entr* (arriers are relativel* !ig!. 7nl* pla*ers #it! strong (rands "an pass on "ost in"reases
Prudent in !ricin" # rural consumersC $!e Indian "onsumer is ver* pri"e sensitive. In t!e personal "are se"tor, (randing allo#s "ompanies to partiall* pass on t!e "ost in"reases to t!e "ustomers. Most pla*ers !ave introdu"ed produ"ts #it! mass'mar%et pri"ing, so as to (uild volumes. $!e in"reased promotional a"tivit* t!at is ta%ing pla"e amongst pla*ers !as relegated (rand lo*alt* to t!e (a"%seat. Moreover, t!e in"reased "ompetition !as restri"ted not onl* gro#t! rates, (ut also t!e a(ilit* to a(sor( fre=uent pri"e in"reases, t!us (enefiting t!e "onsumer. .it! t!e rise in disposa(le in"omes of "onsumers, pla*ers in t!e premium'produ"t "ategories #ill (e a(le to in"rease volumes. $!e pla*ers in t!e personal "are industr* derive t!eir strengt! from !ig! "apital turnover, strong (rand e=uit* and effe"tive management of distri(ution logisti"s. $!e strengt! of t!e distri(ution rea"! is a %e* element in (uilding a su""essful (rand and !elping it garner volumes t!roug! in"reased penetration levels. +o#ada*s, "ompanies #it! strong distri(ution
net#or%s are using t!em su""essfull* to distri(ute ot!er "ompanies' produ"ts as, for instan"e, Mari"o's distri(ution agreement #it! 3>;, to distri(ute its (rands 4Ariel (ar, -ama*
ap, 3ampers diapers, 7ld i"e5 for a fee. :u"! arrangements #ill ena(le ne#er pla*ers to penetrate t!e mar%ets #it!out !aving to set up t!eir o#n distri(ution net#or%s. 1o#ever, a strong distri(ution net#or% "an onl* su""eed #!en used in tandem #it! t!e rig!t pa"%aging and pri"ing. In t!e pri"e'sensitive rural e"onom*, "ompanies !ave to "onstantl* laun"! value'for'mone* produ"ts t!at satisf* t!e needs of t!e rural "onsumer. $!is !as (roug!t a(out t!e mini' pa"% revolution, #!i"! !as (e"ome "ommon a"ross all produ"t "ategories. Brands li%e Ariel, :urf, -olgate, :unsil%, 3antene, et". are no# availa(le in sa"!ets and pou"!es at ver* lo# unit pri"es t!at "an indu"e trials and pus! "onsumption levels. Brea%ing t!e pri"e (arrier !as (e"ome t!e %e* to drive volumes, espe"iall* for "ompanies li%e 122 and -'3, #!i"! derive almost B?'?0 per "ent of t!eir revenues from t!e rural mar%et.FMC$ consum!tion in rural areas% 7rgani,ations li%e 1industan 2ever 2td., +irma -!emi"al .or%s, -olgate 3almolive, 3arle foods and Mal!otra Mar%eting !ave "arved inroads into t!e !eart of rural mar%ets. Various "ategories of produ"ts !ave (een a(le to spread t!eir tenta"les deep into t!e rural mar%et and a"!ieved signifi"ant re"ognition in t!e "ountr* !ouse!olds. And, in t!e pro"ess, t!e regional (rands, lo"al (rands and t!e ot!er un(randed offerings got displa"ed (* t!e leading (rands. -ompan* HLL&'(M Nirma C)emical *orks Col"ate Palmoli e Parle Foods Mal)otra marketin" -ategor* 1ouse!old penetration DD% ?6% BB% B)% 27% % volume of lo"al (randsEun(randed
*as)in" cakes+,ars Tea -alt
DD% ?6% BB%
7f t!e e/penditure on "onsumer goods in rural !ouse!old, appro/imatel*, FF% is on food arti"les su"! as (is"uits, tea, "offee and salt, 20% on toiletries, )B% on #as!ing material, )0% on "osmeti"s, F% on 7$produ"ts and % on ot!er "onsuma(les. A num(er of "ategor* produ"ts !ave esta(lis!ed t!emselves firml* in t!e rural !ouse!olds. It is evident t!at in t!e villages lo#'pri"ed (rands are #ell a""epted and one mig!t feel t!at a larger proportion of t!e pur"!ases made in rural mar%et "an (e attri(uted to lo"alE un(randed pla*ers. :urprisingl*, !o#ever, t!e un(randedElo"al "omponent "ontri(utes to a su(stantial portion of t!e volume of onl* a fe# of t!e !ig!l* penetrated "ategories.
(ncreasin" ,rand a.areness amon" rural consumers% In t!e rural families, studies indi"ate a slo# (ut determined s!ift in t!e use of "ategories. $!ere is a remar%a(le improvement in t!e form of produ"ts used. 9or instan"e, !ouse!olds are upgrading from indigenous teet!'"leaning ingredients to toot! po#der and toot!pastes, from traditional mos=uito repellant to "oils and mats. $!ere is also a visi(le s!ift from lo"al and un(randed produ"ts to national (rands. 9rom lo#'pri"ed (rands to premium (rands.
About HLL
122 !as over B6,000 emplo*ees, and !as "reated 2 la%!s indire"t 0o(s. Its operations are spread a"ross 70 lo"ations in India. $!ere are over ?0 fa"tories, of #!i"! 2D are in (a"%#ard areas. $!e operations involve 2000 suppliers and asso"iates and 7000 sto"%ists and agents. 122 !as emerged as a ma0or G/porter.
Cor!orate Pro/ile 122, a ?).6% su(sidiar* of @nilever 3l", is t!e largest 9M-; -ompan* in t!e "ountr*, #it! a turnover of Rs. ))D (n. $!e "ompan*&s (usiness spra#ls from personal and !ouse!old "are produ"ts to foods, (everages and spe"ialt*
"!emi"als. $!e "ompan* !as a dominating mar%et s!are in most "ategories t!at it operates in su"! as toilet soaps, deter"ents, s%in"are, !air "are, "olor "osmeti"s, et". It is also t!e leading pla*er in food produ"ts su"! as pa"%aged tea, "offee, i"e "ream and ot!er "ulinar* produ"ts. Market -)are 122 gre# at a fast pa"e in t!e mid 90’s driven (* its aggressive a"=uisition spree. 9rom Rs. BD (n turnover 4"ontri(uted 70% (* soaps, detergents and personal produ"ts5, 122&s turnover !as no# gro#n to Rs. ))D (n, #it! soaps and personal produ"ts "ontri(uting ?7% to turnover and (everages and food produ"ts "ontri(uting to 2 % of turnover. ;ro#t! during t!e last fe# *ears !as largel* (een driven (* t!e personal produ"ts (usiness. 1o#ever t!e pa"e of gro#t! !as sla"%ened signifi"antl* in t!e last t#o *ears #it! several %e* segments registering a degro#t! in 200).
Market Capitalisation - HLL
60% HLL Other Brands 40%
Gven as 1industan 2ever is armed #it! t#o (rands '' +i!ar and -o"o"are '' positioned to ta%e on 3ara"!ute, t!e "lear strateg* adopted (* 122 is to atta"% 3ara"!ute indire"tl* (* targeting t!e loose oil "onsumer.
122's overall s!are in t!e Rs ?00'"rore "o"onut !air oil mar%et is a(out 2F %. Mari"o leads #it! a ?B % s!are. 122's +i!ar !as appre"iated its mar%et s!are to )7.2 % in Ma* 2000, from )2 % in end') , as per 7R;'Marg All'India retail audit. $!e (rand's s!are in t!e (eginning of ) stood at .? %.
Per orm!"#e o HLL i" $00% $urnover for t!e *ear in"reased (* B.F2 % gross and B.F7 % net. Produ#t C!te&ories' So!( !"d Deter&e"t $!e overall mar%et gro#t! for
ap > <etergent #as sluggis! during t!e *ear #it! a s!arp de"line in t!e 3opular > 3remium segment of t!e mar%et. In parti"ular, rural mar%et #!ere t!e (usiness !ad a traditionall* strong presen"e performed poorl* follo#ing de"line in t!e agri"ultural gro#t!. $!e dis"ount segment "ontinued to fa"e severe pri"e led "ompetition. Against t!is (a"%ground, t!e (usiness registered a relativel* (etter performan"e in term of gro#t!. Ma0or investment #ere made (e!ind =ualit* en!an"ement of %e* (rand li%e vim, 2u/, :urf and .!eel during t!e *ear #it! "lear"onsumer (enefit. $!ese #ere (a"%ed (* some strong "onsumer promotion during t!e *ear in"luding multi pa"%. 2ife(uo* A"tive #as laun"!ed during t!e *ear and in s!ort time, t!e (rand gre# !andsomel* #it! a B.7 % s!are of t!e segment. $!is !elped offset t!e de"line of 2ife(uo* -ar(oli". Ma0or investment !ad (een planned to retain and gro# t!e 2ife(uo* fran"!ise in 2002. 7verall, 3o#er Brand gre# signifi"antl* a!ead of t!e mar%et and are poised #ell for a strong performan"e on"e t!e mar%et turn around #it! t!e impending e"onomi" revival. Innovation #ill "ontinue to drive gro#t! in t!e follo#ing *ear, #it! several pro0e"ts in t!e pipeline. Ma0or initiative to improve distri(ution rea"!, parti"ularl* in t!e rural mar%et, #ere underta%en during t!e *ear to (uild upon t!e "ompetitive advantage t!at t!e (usiness "urrentl* !old in sales and distri(ution. :ignifi"ant investment #ere also made in net#or%ing and Information $e"!nolog* I$ to manage suppl* "!ain more effi"ientl* and ma%e a =uantum improvement in t!e "ustomer servi"e level. 3ro0e"t 2GA3 #!i"! (ring toget!er t!e "om(ined strengt! of I$, :ales and -ommer"ial to deliver (etter "ustomer servi"e and ma%e t!e entire suppl* "!ain in"luding t!e (a"% end s*stem "onne"ted #it! supplier of material respond faster to t!e s!ort term "!ange in t!e mar%et pla"e, !ad (een implemented to#ard t!e end of t!e *ear in t!e
ap Business and t!e initial result #ere en"ouraging. $!efo"us in 2002 #ill (e to sta(ili,e t!e s*stem and prepare for rolling it out to ot!er (usinesses. A fe# !ig!lig!t of t!e 200) (rand performan"e areC • .it! .!eel and Rin, t!e (usiness not onl* re"orded (rand leaders!ip again after a de"ade (ut also "aptured +o 2 in 2aundr*. • 2u/ re"orded it !ig!est ever s!are in t!e last 2F mont!. • .!eel ;reen 3o#der s!are are at t!eir !ig!est in 2F mont!. • :urf G/"el !ad re"orded it !ig!est value s!are ever.
• $!e (usiness also "reated ne# (en"!mar% in "apa"it* "reation #it! F ne# plants 2 for +:< Bar, ) for
ap for +:< 3o#der (eing "ommissioned in re"ord time. $!ese fa"tories !ad sta(ilised ver* =ui"%l* giving signifi"ant suppl* "!ain and ta/ (enefit to t!e (usiness. • :uperior $e"!nolog* in t!e (usiness repertoire #ill (e leveraged to deliver improved =ualit* at lo#er "ost to a"!ieve profita(le gro#t!. $!e Business sees a (ig opportunit* in mar%et gro#t! in t!e medium to long term, parti"ularl* in t!e rural area, and !ad initiated programme to drive "onsumption of soap in t!e "onte/t of t!e in"reased a#areness of !ealt! and !*giene. 9or t!e *ear 2002, mar%et gro#t!, #!i"! is lin%ed to t!e turnaround of t!e e"onom*, remains t!e ma0or ris% fa"tor.Perso"!) Produ#t' 3ersonal 3rodu"t !ad led a good *ear in 200), #it! dou(le'digit gro#t!. $!is #as a"!ieved (* fo"using on t!e "ore (rand and investing in (uilding t!eir e=uit*. In spite of slo# mar%et gro#t!, *our -ompan* in"reased it investment in innovation, resear"! and advertising on it (ig (rand resulting in gro#t! a!ead of t!e mar%et. $!e 1air -ategor* !ad anot!er *ear of gro#t!, #it! !ig! =ualit* relaun"!es of -lini" 3lus, -lini" All -lear (ottle #ere "!anged in line #it! international development, #!ile a ne# stand up pa"% #as laun"!ed in t!e mid pri"e segment. Hour -ompan* entered t!e nas"ent "ategor* of !air "olourant, #it! t!e laun"! of :unsil% !air "olour in t!e metro. In order to address t!e
opportunit* at t!e lo# pri"e end of sa"!et, 2u/ sa"!et #ere laun"!ed at pri"e of Re) and Re0.?0, and t!ese !ad met e/pe"tation. $!e :%in"are -ategor* !ad a ver* good *ear, #it! 9air > 2ovel* as star performer in 200). In 9air > 2ovel*, t!e laun"!es in 200) in"luded a fairness soap, a dar% "ir"le under e*e "ream, and sa"!et #it! a re"losea(le "ap. $!e main 9air > 2ovel* "ream (rand #as also relaun"!ed #it! improved pa"%aging and "ommuni"ation. All t!ese initiative, along #it!
investment in advertising and rural penetration, led to !ig! gro#t! for t!e fran"!ise t!roug! t!e *ear. $!e 3ond (rand returned to dou(le'digit gro#t! after a slo#do#n for 2 *ear, #it! "ompre!ensive relaun"!es to it tal" as #ell as s%in"are range. $!e gro#t! #as a"!ieved (* improvement in t!e fun"tionall* of produ"t, pa"%aging and impa"tful mar%et a"tivit*. A ne# tal" variant, pond 2ig!t n 9res!, and a ne# mini -lod -ream 0ar pri"ed at Rs? #ere su""essfull* laun"!ed in 200). $!e s%in range of 2a%me #as renovated and strengt!ened and a premium ne# produ"t, 2a%me 9air 3erfe"t, #as introdu"ed to#ard t!e end of 200). In t!e 7ral -ategor*, 3epsodent #as relaun"!ed and emerged mu"! stronger in 200) as a result of innovation, advertising and mar%etpla"e a"tivation. $!e introdu"tion of value pa"% as #ell as ne# advertising !elped in"rease mar%et s!are of 3epsodent. Hour -ompan* de"ided to deprioriti,e t!e toot!paste (rand Aim, in order to fo"us all effort on 3epsodent and -lose @p t!is strateg* !ad (een su""essful as demonstrated (* t!e gro#t! and (rand (uilding t!at !ad (een a"!ieved in t!e se"ond !alf of 200). In t!e <eodorant (usiness, A/e "ontinued on a !ig! gro#t! plan, #it! man* imaginative mar%et a"tivities and ne# introdu"tion in 200). Re/ona #as relaun"!ed #it! international pa"%aging and !ad a"!ieved salien"e on t!e 2F !ours deliver* of deo (enefit.
-olour "osmeti"s sa# man* innovation on (ot! 2a%me and Glle )D in"luding a ne# range of "olour (ased on t!e 2a%me India 9as!ion .ee%. 122 a"=uired t!e asset and lia(ilities of it "olour "osmeti"s, fragran"es and personal "are (usiness from 2a%me 2ever 2td at net (oo% value, #it! effe"t from B)EBE200). 3ost merger, Avian"e (usiness "ontinued to fo"us on dire"t mar%eting of personal "are produ"t to gain (etter understanding of t!is "!annel .
:uppl* "!ain and souring effi"ien"ies led to signifi"ant "ost redu"tion, #!ilst =ualit* improvement "ame t!roug! te"!nologies and innovation. Hour -ompan* "ontinues to fo"us on lo# unit pri"e pa"%, #!i"! provide t!e "onsumer #it! =ualit* produ"t at lo# put do#n pri"e. A ne# 3ersonal 3rodu"t fa"tor* #as "ommissioned in <oom <ooma in Assam, to "ater to t!e gro#ing mar%et demand. to ot!er (usinesses.
Product&0 im1 HLL 02)ar 2)ar ka mo) tod 3a.a,1
In )
B Vim Bar #as laun"!ed. $!is produ"t !ad man* (enefits in"luding (etter "lean, ease of !andling and eas* storage. Vim Bar #as re'laun"!ed in ) 7 #it! an improved formulation and ne#
"ommuni"ation, #!i"! ta"%led e"onom* and performan"e. Mu"! appre"iated (* t!e mass mar%et, it resulted in "onversions not 0ust from po#der users, (ut also from pro/* users #!o did not upgrade to po#ders (ut preferred to use Vim Bar instead. Vim <is!#as! Bar is t!e mar%et leader #it! 60 per "ent s!are in t!e Rs F00 "rore (randed dis!#as! mar%et $!e (rand !as gro#n signifi"antl* registering strong dou(le'digit gro#t!s in (ot! volume and value terms. Vim Bar #as relaun"!ed a se"ond time in 2002, #it! a uni=ue I:tain -utterJ formulation t!at removes t!e toug!est stains su"! as (urnt mil% and g!ee stains. $!is ne# formulation evolved t!roug! resear"! and is no# setting (en"!mar%s in toug! stain removal. +e# Vim offers t!e "onsumer a superior performan"e at a great value. . +e# Vim #it! its "ontemporar* pa"%aging illustrates d*namism and s#ift stain "utting po#ers. 122 is fo"used on resear"! and development for "onsistent deliver* of superior produ"ts. $!us, +e# Vim !as (een developed #it! a uni=ue stain'"utter formulation t!at removes t!e toug!est stains su"! as (urnt mil% and g!ee stains. +e# Vim offers t!e "onsumer a superior performan"e at a great valueJ. $!e ne# Vim !as a totall* ne# mi/, rig!t from t!e pa"%aging to t!e formulation of t!e produ"t. +e# Vim #it! improved formulation t!at solves t!e !ouse#ife&s *et unsolved pro(lem of toug! stain removal of (urnt mil%Eg!ee stain.
.
Vim is t!e mar%et leader in t!e dis!#as! "ategor*. $oda* Vim is availa(le in po#der, (ar and li=uid form. Vim "ontinuousl* strives to innovate its produ"ts to en!an"e t!e lives of its "onsumers. .!et!er it (e t!roug! its ne# ':tain -utter' formula in its Vim Bar or it's t!e stain (usters in its po#ders, Vim stands for t!e (est =ualit* in dis!#as! produ"ts. 'im as a 4rand
Vim, among 1industan 2ever's B0 po#er (rands, is loo%ing at s"ouring t!e "ompetition furt!er. $!oug! t!e (rand K led (* t!e flags!ip Vim (ar K remains t!e mar%et leader in t!e overall Rs ),000'"rore dis!#as!ing mar%et, 122 L"omplete %it"!en "leaner' Vim 4utensil "leaner5, #!i"! is ran%ed t!e fourt! most preferred (rand in ur(an mar%et, doesn&t find a pla"e in t!e top ten in t!e rural mar%et 7n (rand e=uit* ran%ing. $!oug! it #as a mar%et leader Vim <is!#as! Bar is t!e mar%et leader #it! 60 per "ent s!are in t!e Rs F00 "rore (randed dis!#as! mar%et $!e (rand !as gro#n signifi"antl* registering strong dou(le'digit gro#t!s in (ot! volume and value terms Hll !lanned /or ,rand e5tension Anot!er (rand e/tension #as planned is t!at of an Lappli"ator', to (e pri"ed at parit* #it! n*lon s"ru((ers. -urrentl*, :"ot"!(rite is t!e onl* (randed appli"ator in t!e mar%et, pri"ed at a premium. 122 !as pro0e"ted a Rs 260'"rore turnover for Vim t!is *ear, #!i"! translates to a 2) per "ent gro#t! over t!e previous *ear. Vim (ar, #!i"! a""ounts for over t!ree'fourt!s of t!e Vim (rand's sales, is e/pe"ted to (e t!e %e* driver of gro#t!. M7f t!e pro0e"ted Rs 260 "rore, #e e/pe"t Vim (ar to (e a Rs 2F0'"rore (rand (* t!e *ear'end, #it! Vim detergent po#der and Vim li=uid a""ounting for t!e remaining Rs 20 "rore,M t!e offi"ial sa Vim li=uid, mean#!ile, #ould "ontinue to (e a slo#(urn (rand.
Vim also planned to e/tend t!e (rand (* introdu"ing <etergent li=uids . detergent li=uids is a small, t!oug! emerging mar%et and !as a limited presen"e of (rands su"! as Vim, $eepol and 3ril. $!e mar%et is estimated at 600 tonnes, or roug!l* Rs 200 "rore. Vim li=uid #as rolled out re"entl* in "ities and to#ns #it! )0'la%!'plus population. Market -i6e%
$!e total si,e of t!e dis! #as! mar%et, estimated at Rs),000'"rore, re"orded a F0 per "ent gro#t! over last *ear. 7ver 60 per "ent of t!e mar%et is dominated (* (ars, #!ile dis! #as! po#ders a""ounts for B2 per "ent. $!e penetration levels are, !o#ever, still ver* lo#. Gstimates s!o# t!at nearl* ?0 per "ent of t!e ur(an population and D0 per "ent of t!e rural one still use pro/* produ"ts li%e as! and ot!er "!eap detergents for dis!#as!ing purposes. 122 is t!e leading pla*er, #it! its Vim Bar. MAR2ET -HARE% 7f t!e overall Rs ),000'"rore dis#as!ing mar%et, t!e (randed se"tor a""ounts for Rs F00 "rore. A""ording to A- +ielsen data, #it!in t!e dis!#as!ing (ar segment, Vim's mar%et s!are is estimated at D2 per "ent s!are. Com!etitors $!e (rand fa"es toug! "ompetition from +irma 4in t!e +ort! and .est5, 7dopi" 4in t!e .est5 and :a(ena 4in t!e
ut!5 it #as t!e strongest in ma!aras!tra.Marketin" strate"7 ada!ted ,7 HLL $!e "ompan* !anded over t!e mar%eting for vim to 7>M in Maharashtra and Andhrapradesh .7>M rural mar%eters adopted uni=ue strateg* in t!e initial stages to mar%et t!e produ"t in rural areas Ma!aras!ta and And!raprades!. As t!e mar%eters %ne# t!at it #as t!e initial stage in rural areas and to provide a ni"!e in t!e rural mar%ets #as diffi"ult as t!e produ"t itself #as not availa(le in t!is areas.
9irst to target t!e mar%et in rural areas t!e* sa# to it t!at t!e mar%et #!i"! t!e* are targeting #as in t!e 2 to B %m range from t!e !ig!#a*s (e"ause t!e* %ne# it #ont "reate sense to mar%et t!e produ"t in t!ose areas #!i"! are a#a* from t!e !ig! #a*s as t!e produ"t #as not availa(le in t!ose areas. $!e overall mar%eting #as (ased on distri"t'to'distri"t level. $!e* !ad t!oug!t to enter in ot!er areas (e*ond t!e 2toB%m range after ma%ing t!e produ"t availa(le to t!e initial targeted mar%et.
t!at it (e"omes eas* for t!e mar%eters to introdu"e, as t!e produ"t #as availa(le in t!e neig!(oring villages and t!e produ"t (e"omes familiar to t!e people. Marketin" se"mentation $!e mar%et segmentation #as in t!ose areas #as done on t!e (asis of t!e !ouses t!at t!e people #ere living into. As t!e people in rural villages lived in different t*pes of !ouses. $!e t*pe of t!e !ouses t!e* lived #ere kaccha ghar, kaccha-pukka, pukka ghar t!e mar%eters also surve*ed t!e per "apita in"ome of individual in rural areas.C)allen"e )5 $!e "!allenge for mar%eters #as to "onvin"e t!e rural "onsumer and as% t!em to spend mone* on a produ"t #!ere t!e* use to spend no mone* on a parti"ular produ"t. As t!e "onsumer used pro/* produ"ts to "lean t!eir vessels, #!i"! #as availa(le to t!em at, free of "ost. $!e real "!allenge #as to transform t!e prospe"t to t!e "onsumer of t!e produ"t.
25 $!e ot!er "!allenge #as to "ommuni"ate to t!e rural people. It #as diffi"ult for t!e mar%eters to "ommuni"ate to t!e rural people unless t!e* #ere "ommuni"ated in t!eir o#n regional or lo"al language of t!e rural "onsumer. B5 After t!e surve* done it #as found t!at t!e rural "onsumer used aluminum vessel to "oo% t!eir food t!is made t!e "ompan* to "!ange t!eir entire "ommuni"ation. Garlier t!e "ompan* use to "ommuni"ates as, Iap%a "!e!ra (!i de%!a ga safJ. +o# seeing t!at t!e rural "onsumers #ere using aluminum vessel. It #as a "!allenge for t!e mar%eters to appeal and "ommuni"ate t!e produ"t to t!e rural "onsumer and as it #ont (e sensi(le to "ommuni"ate t!em #it! t!e same "ommuni"ation or (ase line. $o "ome #it! ne# "ommuni"ation or tag line #!i"! t!e rural "onsumer "an relate #it! t!eir usage and (e!avioral pattern.
Tar"et consumer $arget "onsumer for IvimJ #ere ? 1ouse!olds #ives ? Restaurants ? :!ops and !otel t!at offer "oo%ed food produ"ts
Ad ertisement% 122 to advertise t!e vim used (ot! medium of "ommuni"ating t!at formal as #ell as informal. 9ormal advertising #as done t!roug!C )5 +e#spapers and maga,ines 25 $elevision B5 Radio F5 -inema ?5 7utdoor advertisement t!roug!C ? :ign(oards ? .all painting ? 2o"al (us (oards ? 3rodu"t displa* (oards (et#een villages 65 3oint of pur"!ase used #ere a5 :treamers (5 $inplates "5 1angings
Promotion strate"7 $!is strateg* #as used at village to village (asis
@se of audio' video vans
<oor to door mar%eting
Mohalla’s
Retail "onta"t
-entral lo"ation In t!e pro"ess of promoting IvimJ in rural areas. Neeping into mind $!e d*nami"s of rural "onsumer and distri(ution infrastru"ture, t!e mar%eter !ad adopted a different promotion strateg* to promote t!e vim in rural areas. $!e formal media used to "ommuni"ate t!e produ"t #as $.V, radio "inema ,print proportionatel* depending upon t!eir rea"! and t!eir influen"e on rural masses. $!e informal promotion strateg* #as formulated. $!e steps involved to promote t!e produ"t in rural areas. $!e first step #as t!e usage of audio' visual pu(li"it* vans. $!is pu(li"it* vans #ere "overed (* (eautiful (anners, t!is (anners #ere em(ossed #it! t!e produ"t p!otos, t!e (ase or tagline of t!e produ"t and "olorful pi"ture t!at "an attra"t t!e rural "onsumer. $!e audi(le material used #ere a tunes of "urrent film* songs, #!i"! #ere "omposed #it! ne# l*ri"s, t!is l*ri"s gave t!e spe"ial features a(out t!e vim. $!is step #as used as an introdu"tion of t!e produ"t vim in rural mar%ets. $!e se"ond step in t!e promotion strateg* #as to do <oor'to'door mar%eting. $!is step #as ver* #ell designed. $o do <oor' to' door mar%eting t!e mar%eter emplo*ed t!e *oung lo"al *out!s #!o "an
"ommuni"ate #it! rural people in t!e lo"al language. $!is *out! "arried along #it! t!em flip charts as a su(stitute medium to $.V. $!is flipchart "ontained a stor*. $!e stor* used in t!e flip "!art #as a(out t#o female named I NamalaJ and I(imlaJ. G/plaining t!at %amala used vim and (imla used ot!er pro/* produ"t. Namala s!o#ed (imla t!e (enefit of using vim in "ompare to ot!er pro/* produ"t and e/plaining t!e features of t!e produ"t. $!e <oor'to'door mar%eting step #as "omplementar* to ot!er step t!at involved t!e parti"ipation of t!e rural !ouse#ives, #!i"! "ontained games. $!is games #ere strategi"all* designed so as to position t!e produ"t and t!e pri"e of t!e produ"t in t!e minds of "onsumer. $!e games used #ere ?
otting t!e rig!t pri"e. ? Mat"! t!e pairs. ? $urn t!e #!eel $!is games #ere used to enti"e t!e people and pull t!em to Imo!allaJ t!e small pla"e (et#een t!e !ouses so as to do mass mar%eting as mu"! as possi(le. $!is all #as done as pro"ess of mass mar%eting.$!e fourt! step in promotion #as Ret!i) #o"t!#t In t!is step t!e mar%eters gave s"rat"! "oupons to t!e "onsumers #!o "ame to pur"!ased vim #it! in"entive pa"%ages 4i.e. pa"%ages one for t#o5. $!e pri"e given #ere on t!e. $!e pri,es distri(uted to #!om so ever #on #as )2mont!s soaps. 3ri,es #ere distri(uted on t!e spot so to "reate (etter per"eption of t!e "ompan* and produ"t in t!e mind of t!e "onsumer. $!e
same #as made appli"a(le for t!e retailers on t!e (ul% pur"!ase. $!is retailers #ere also given spe"ial dis"ount on t!eir (ul% pur"!ase. $!e final step #as t!at all t!e people #ere invited to t!e #e"tr!) )o#!tio". $!is "entral lo"ation #as usuall* a pla"e #ere all t!e village people assem(led so t!at (e"omes eas* to "ommuni"ate at large to t!e masses. $!e a"tivit* underta%en at t!e "entral lo"ation #as "leaning up t!e s#eet ma%ers vessels, #!i"! #as t!e toug!est to do. It #as "ommuni"ated as 0 -a/ kare mita)ee.ale ki kadai1 $!is e/er"ise of promoting t!e produ"t #as one of t!e (est as #!en it #as proved in front of t!e "onsumer as vim "leaned I t!e mita!ee#ale %i %adaiJ #it!out living an* greasiness. $!e advantages of t!e Vim #ere also s!o#n to t!em. $!e advantages of vim #ere t!at it relieved from t!e !ards!ip of s"ru((ing t!e vessel, #!i"! #as done #it! ease #it! t!e !elp of IvimJ. $!e ot!er advantage #as t!at it #ould "ertainl* save t!eir lot of time, #!i"! "an (e utili,ed effe"tivel* for some ot!er #or%. $!is "reated a "lear per"eption a(out t!e produ"t. $!is pro"ess #as used again and again in "apturing different mar%ets.
T)e ot)er !romotion strate"7 to !romote t)e !roduct Ro!ds*o+s "omprising attra"tivel* designed floats #ill traverse t!e lengt! and (readt! of t!e "ountr* during t!e time span of t!e offer.
$!e #!r"i,!), #!i"! #ill "over !undreds of small to#ns and villages apart from t!e metros and is part of a massive rural promo initiative t!at 122 plans to unleas!. $!e "ompan* even !ad to promoted t!e produ"t in H!!ts - Me)!s of different villages.
To !romote t)e im HLL !lanned to distri,ute "old as !ri6e I+ a (id to promote vim one of its leading dis!#as! soap, Vim ;old Bar, 122 !ad laun"!ed a (elo#'t!e'line advertisement. $!is medium proposes to (ring Vim to t!e rural !ouse!olds via dire"t intera"tion (et#een "ustomer and produ"er. $!is promotional (lit,%rieg a"ross t!e "ountr* in"ludes giving a#a* gold #ort! Rs ? "rore. $!e offer givesO "ustomers stand a "!an"e to #in gold in different denominations (* 0ust s"rat"!ing a "ard re"eived on ever* pur"!ase of a Vim (ar. Ga"! s"rat"! "ard "arries an D'digit num(er. Gver* :unda*, one su"! num(er #ill (e announ"ed on
n* Gntertainment $V (et#een D' p.m. and t!is num(er #ill (e valid for t!e entire period of t!e offer. If t!e num(er on t!e s"rat"! "ard of t!e "onsumer mat"!es #it! t!e num(er announ"ed on $V, t!e* #ould (e eligi(le for a F00 gm gold (ar ' t!e #eig!t of t!e Vim (ar in gold. In "ase of fe#er digits mat"!ing, t!e "onsumer stands to #in )00 gm, )0 gm, or ) gm of gold or Rs )00 off on pur"!ase of 122 produ"ts from t!e retailerCommunication Vim Bar !as al#a*s "reated an impa"t in t!e mar%et #it! its pat!'(rea%ing "ommuni"ation. $!e "ommuni"ation !as (een designed to po#erfull*
"ommuni"ate t!e toug! stain removal properties of t!e Vim Bar. 122 "reated a ne# "onsumer lingo for t!e toug! stain pro(lem #it! t!e "ampaign (aseline of Vim (eing t!e IN!ar N!ar %a mo! tod 0a#a(J. 122 !ad to "ompletel* "!ange its "ommuni"ation #!en it entered into rural it !ad to "ompletel* "!anged its "ommuni"ation from t!e previous one t!at #as t!at after "leaning t!e vessel #it! (ar *ou "an see *our fa"4ap%a "!e!ra B!i de%!a ga saf5 to 4%!ar %!ar %a mo! tod 0a#a(5 0ust (e"ause t!e rural "onsumers used aluminum vessels to "oo% t!eir food. It #ont "reate sense to appeal t!em to (u* t!at produ"t t!at did not suit t!eir living. Pricin" Initiall* Vim (ar #as pri"ed at Rs )F for F00 gm. An entr*'level Rs 200'gm Vim (ar pri"ed at R s 7 also e/ists. But #it! t!e laun"! of ne# vim it #as pri"ed at Rs )B for a F00 gms pa"% and Rs 6.?0 for a 200 gms pa"%. But #it! t!eir fora* into t!e rural areas t!e pri"e #as "!anged to RsF for 200gm and Rs7.?0 forF00gm. $!e pri"es #ere revised (* %eeping t!e "onsumer (e!avior, in"ome, and "onsumption pattern of rural people. Packa"in" $!e rural "ustomers are usuall* dail* #age earners and t!e* don&t !ave mont!l* in"omes li%e t!e ones in t!e ur(an areas !ave.
t!e pa"%aging #as done in smaller units and lesser'pri"ed pa"%s t!at t!e* "an afford given t!eir %ind of in"ome stream. Anot!er important fa"tor is -onvenien"e. :in"e man* !ouse!olds don&t !ave proper (at!rooms and onl* !ave a #indo# or t!ings li%e t!at to %eep su"! t!ings$!e pa"%aging of I VIMJ done %eeping in mind t!e rural "!ara"teristi". $!e paper #rapped to vim (ar #as in *ello# "olors s!o#ing t!e (rand name vim and "ontaining t!e pi"ture of lime "learl* to s!o# t!at it got lime
"ontents in it. $!e "olures used are red, *ello# and green. $!is sort of pa"%aging #!at made vim to (e t!e mar%et leader in t!e dis! #as! mar%et . 8istri,ution%
Mot!er depot4 Mot!er depot ->9a&s5 ->9a&s
Ruraldistri(utors distri(utor Rural :u('sto"%iest :u('sto"%iest Retailer Retailers "onsumer -onsumers
122 distri(ution s*stem is t!e (est amongst 9M-; "ompanies. At present, 122's produ"ts, manufa"tured a"ross t!e "ountr*, are distri(uted t!roug! a net#or% of a(out 7,000 redistri(ution sto"%ists "overing a(out one million retail outlets. G/tending availa(ilit* <ata on rural "onsumer (u*ing (e!aviour indi"ates t!at t!e rural retailer influen"es B?% of pur"!ase o""asions. $!erefore, s!eer produ"t availa(ilit* "an determine (rand "!oi"e, volumes and mar%et s!are.
122 used t!e prin"iple of pro0e"t stream line .$!e prin"iple of 3ro0e"t :treamline is to leverage our s"ale and organi,ational s*nerg* to in"rease rea"! in rural mar%ets. $!e pivot of :treamline is t!e Rural <istri(utor 4R<5,
#!o !as)?'20 rural su('sto"%iest atta"!ed to !im. Ga"! of t!ese su(' sto"%iest is lo"ated in a rural mar%et. $!e su('sto"%iest t!en performs t!e role of driving distri(ution. 3ro0e"t :treamline #as "on"eptuali,ed to signifi"antl* en!an"e "ontrol on t!e rural suppl* "!ain t!roug! a net#or% of rural su('sto"%iest, #!o are (ased in t!ese ver* villages. As part of t!e pro0e"t, !ig!er =ualit* servi"ing, in terms of fre=uen"*, "redit and full'line availa(ilit*, #ould (e provided to rural trade. $!ere(*, giving us a su(stantial "ompetitive edge over t!e ne/t de"ade $!e role performed (* t!e Redistri(ution :to"%iest !as also undergone "!anges over t!e *ears. 9inan"ing sto"%s, providing manpo#er, providing servi"e to retailers, implementing promotional a"tivities, e/tending indire"t "overage, reporting sales and sto"% data, s"reening for transit damages are some of t!e fun"tions performed (* t!e R: toda*. $!e R: #as re=uired to provide t!e distri(ution units to t!e "ompan* salesman. $!e R: finan"ed !is sto"%s and provided #are!ousing fa"ilities to store t!em. $!e R: also undertoo% demand stimulation a"tivities on (e!alf of t!e "ompan*.$!e R: #ould (e a(le to provide "ustomer servi"e onl* if !e #as servi"ed #ell. $!is %no#ledge led to t!e esta(lis!ment of t!e M-ompan* <epotsM s*stem. $!is s*stem !elped in transs!ipment, (ul% (rea%ing, and as a sto"% point to minimi,e sto"%'outs at t!e R: level. In t!e re"ent past, a signifi"ant "!ange !as (een t!e repla"ement of t!e -ompan* <epot (* a s*stem of t!ird part* -arr*ing and 9or#arding Agents 4->9As5. $!e ->9As a"t as (uffer sto"%'points to ensure t!at sto"%'outs did not ta%e pla"e. $!e ->9A s*stem !as also resulted in "ost savings in terms of dire"t transportation and redu"ed time lag in deliver*. $!e most important (enefit !as (een improved "ustomer servi"e to t!e R:. -ertain ->9As #ere sele"ted a"ross t!e "ountr* to a"t as mot!er depots. Ga"! of t!em !as a minimum num(er of 8I$ depots atta"!ed for sto"% re=uirements. All (rands and pa"%s re=uired for t!e set of mar%ets #!i"! t!e M< and 8I$s servi"e in a given area are sent to t!e mot!er depot (* all manufa"turing units. $!e 8I$s dra# t!eir re=uirements from t!e M< on a #ee%l* or (i'#ee%l* (asis.
$!e ot!er distri(ution s*stem used #as Pro.e#t S*!/ti and Pro.e#t 0*!r!t . 7ur rural gro#t! engine raises in"omes of rural families (* "!annel intervention t!roug! rural :elf'1elp ;roups 4:1;5, #!i"! operate li%e dire"t'to'!ome distri(utors. $!e model "onsists of groups of 4)?'205 villagers (elo# t!e povert* line 4Rs.7?0 per mont!5 ta%ing mi"ro'"redit from (an%s, and using t!at to (u* our produ"ts, #!i"! t!e* #ill t!en dire"tl* sell to "onsumers. In t!e pro"ess, generating emplo*ment and in"omes for t!emselves, and in"reasing t!e rea"! of our produ"ts.
3R78G-$ 7+ R@RA2 MARNG$I+;
0'(M1
BMI$$G< BH CAC2NO*LE8$EMENT
It gives me a great pleasure in presenting t!is report on t!e su(0e"t rural mar%eting and ena(les me to get t!e insig!t %no#ledge a(out t!e su(0e"t rural mar%eting I #ould li%e to t!an% 3rof.Nris!namoort* for givin me time to time guidan"e as and #!en re=uired for "ompleting t!is pro0e"t 2astl* I e/press m* gratitude to#ards Mr Ra!ul. Nar#e47>M 7@$RGA-1 <es%5 for providing me #it! t!e information a(out t!e mar%eting a"ivities underta%en for vim in rural areas.
doc_174810235.doc