A Project on
Gone are the days when a rural consumer went to a nearby city to buy ‘branded products and services’. Trends indicate that the rural markets are coming up in a big way and growing twice as fast as the urban, witnessing a rise in sales of hitherto typical urban kitchen gadgets such as refrigerators, mixer-grinders and pressure cookers. According to a National Council for Applied Economic Research (NCAER) study, there are as many 'middle income and above' households in the rural areas as there are in the urban areas. There are almost twice as many 'lower middle income' households in rural areas as in the urban areas.
The absolute size of rural India is expected to be double that of urban India. The study on ownership of goods indicates the same trend. It segments durables under three groups - (1) necessary products - Transistors, wristwatch and bicycle, (2) Emerging products – Black & White TV and cassette recorder, (3) Lifestyle products – Color TV and refrigerators. Marketers have to depend on rural India for the first two categories for growth and size. Even in lifestyle products, rural India will be significant over next five years. Apart from increasing the geographical width of their product distribution, the focus of corporates should be on the introduction of brands and develop strategies specific to rural consumers. Britannia Industries launched Tiger Biscuits especially for the rural market. It clearly paid dividend. Its share of the glucose biscuit market has increased from 7 per cent to 15 per cent.
About the company
Hindustan Unilever Limited (abbreviated to HUL), formerly Hindustan Lever Limited, is India's largest consumer products company and was formed in 1933 as Lever Brothers India Limited. It is currently headquartered in Mumbai, India and its 41,000 employees are headed by Harish Manwani, the non-executive chairman of the board. HUL is the market leader in Indian products such as tea, soaps, detergents, as its products have become daily household name in India. The Anglo-Dutch company Unilever owns a majority stake in Hindustan Unilever Limited. The company was renamed in late June 2007 to "Hindustan Unilever Limited" to provide the optimum balance between maintaining the heritage of the Company and the future benefits and synergies of global alignment with the corporate name of "Unilever". This decision will be put to the Shareholders for approval in next "Annual General Meeting". HUL is one among those companies in the country that derives huge revenues (over 50 per cent) from the rural areas.
Evolution of HUL’’’’’’’’’’s distribution model To meet the ever-changing needs of the consumer, HUL has set up a distribution network that ensures availability of all their products, in all outlets, at all items. This includes, maintaining favorable trade relations, providing, innovative incentives to retailers and organizing demand generation activities among host of other things. HUL has followed a strategy of building its distribution channels in a transitional manner; and in different successive phases of the evolution of its distribution system, has penetrated well into the rural market. Phase I
The first phase of the HUL distribution network had wholesalers placing bulk orders directly with the company. Large retailers also place direct orders, which comprised almost 30 percent of the total orders collected. The company salesman grouped all these orders and placed an indent with the Head Office. Goods were sent to these markets, with the company salesman as the consignee. The salesman then collected and distributed the products to the...