Unilever's Approach: Doing Well by Doing Good

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“Doing well by doing good”

Unilever’s approach to the opportunity at the Bottom of the Pyramid

Presentation at the GTZ BOP Conference
Berlin: Thursday 18th September 2008 Anita Kumar: Manager Corporate Responsibility

Unilever is a global company

with operations in over 100 countries

We market a broad range of brands

covering food, household & personal care products

Our brands are sold in nearly every country

and are present in half the households on the planet

With deep roots in the developing world…

1918 1888 Cote 1918 India d’Ivoire Nigeria 1929 Kenya 1918 Ghana 1910 Congo 1933 Indonesia 1930 Brazil

1911 China

1903 South Africa

….which today accounts for 44% of our sales



Other developed 26%

D&E 36%

Other developed 24%

D&E 44%

Western Europe 38%

Western Europe 32%

Tackling social challenges has been central to our way of doing business…. Our Mission in 1890
“To make cleanliness commonplace, to lessen the work for women; to foster health and contribute to personal attractiveness that life may be more enjoyable and rewarding for the people who use our products”. Low cost margarine helped make essential fats available to undernourished people in 19th century Europe

Lever’s success in making low-cost soap widely available to the urban poor made a big contribution to Public Health in Victorian Britain

Since we started making soap and margarine a century ago

In D&E markets addressing affordability has been a key driver of growth D&E population 2007 (billions)

Have lots




Have nots


Helping build a differentiated brand portfolio

Laundry, India

Hair, Indonesia

…supported by strong distribution depth

from the favelas of Sao Paolo to the villages of India

And yet the development challenge in D&E is significant

Other developed 26%


Water Scarcity



Safe dinking water

Presenting the biggest growth challenge for our Brands

Other developed 26% Hygiene

Water Scarcity



Safe dinking water

And also for our distribution systems

Have lots




Have nots

As brands seek business lower down the pyramid our distribution strategy is evolving to support them

Shakti a Unilever initiative in rural India

“There are many positive ways for business to make a difference in the lives of the poor - not through philanthropy, though that is also very important, but through initiatives, that over a period of time, will help build new markets” - Kofi Annan, ex-UN Secretary General


India a country of contradictions

•775 million people in 638,000 villages •Literacy – 46% (F), 71% (M) •Per capita income $515 pa

•250 million people in 5161 towns •Literacy: 73% (F), 86% (M) •Per capita income $1244 pa

1 in 8 people on this planet lives in an Indian village

Why Rural India is difficult…
• To Reach:
– Small, scattered settlements and poor infrastructure make distribution difficult – Over 500,000 villages not reached directly by HUL’s distribution system

• To Communicate:
– Low literacy (esp. female literacy at 46%) hampers effectiveness of print media and POSM – Poor media-reach: 500 million Indians lack TV and radio, limiting the number of media options

• To Influence:
– Low category penetration, consumption, brand awareness – Per capita consumption in Unilever categories is 33% of urban levels

Potential versus Accessibility The challenge in Unilever’s rural distribution Paradigm Shift required


Conventional HUL distribution models

Market Potential

500,000 villages

The Basis of the Shakti Programme
• The business innovation: Move away from current mass distribution models to direct-to-home sales through individuals in rural India • The Idea: – Train women from Self Help Groups to distribute HUL products in ‘difficult to...
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