It was a initiative of Hindustan liver limited company to enter the rural market efficiently along with a social objective of empowering rural women. some key questions regarding this are answered in the following text. this is my perspective.
Key features of project "Shakti"?
Key features of project Shakti are:
Ø It is an effective channel to reach to rural market which is not easily possible with the usual measures.
Ø It also carries social objective along with it as it helps empowers the women of the village so they can support the family.
Ø It has targeted the females which is a good proposition as males are busy in other wage earning activities so they might not spare time for the activities of the project Shakti.
Ø It provide a consistent competitive advantage to HLL over its competitors, as through this channel they are able to reach directly to the consumer, and there is personal touch to consumers as Shakti entrepreneur is one among the villagers only.
2)How can Shakti make a contribution for HLL bottom line
By the following measures Shakti can contribute for HLL bottom line.
Ø Shakti can provide a loyal customer base and a self motivated team of sales representatives which can penetrate the rural market which is largely untapped.
Ø It can contribute to their brand building through iShakti centre which will make them more interested as this scheme will provide them with the knowledge regarding all the relevant areas.
3 Economic and social value created by Shakti.
Ø It added to the reach of HLL to the rural market which was largely untapped before.
Ø It made rural women self sustained.
Ø It empowered the women which is the most marginal part of the rural society through which it helps to improve the living standard and catalyzes affluences in rural India.
Ø It also enabled villagers to enhance their knowledge about personal hygiene and other basic values through Shakti vani.
Ø It also provided a platform through iShakti to the villagers so that they can able to know about the knowledge regarding farming, e-governance etc.
Ø The connection between business and communities will develop lifetime customers for HLL. This involvement may not be the typical role of business, but as long as it is profitable to HLL without compromising moral and legal issues, it will be a good move for HLL to increase its reputation as a socially responsible organization.
Ø It was seen as an effective measure of corporate social responsibility.
4) Do you think Shakti is profitable? If yes, why?
Yes it is a profitable.
Ø It has created a vast team of local, credible, one to one endorsers of the company in the rural segment which otherwise would involve a large cost to the company.
Ø It also created a channel for the company to enter the rural segment effectively.
Ø It had broken even in 2004.
Hindustan Unilever Limited is India‟s largest fast moving consumer goods and Services Company.
Over 70% population of India resides in villages so tap this market company need to develop economicallyviable and efficient distribution channels in villages.
Poor connectivity among villages and widely scattered consumers are main problems.
Recently it has launched a project „Shakti‟ to penetrate the rural market for FMCG
goods. About 12000women entrepreneurs had been appointed, covering nearly 50,000 villages in partnership with nearly 300
Company wants to scale its operation so to achieve a consumer base of around 100 million by 2006. It isestimated that this will require a network of about 25000 entrepreneurs.
HLL has also introduced Shakti Vani to create awareness in villages about personal health and communityhygiene.
How to improve the distribution channels to gain a consumer base of 100 million by 2006.
The greatest challenge that Shakti face is costs and management control to make it profitable.
Building confidence/self-sufficiency among Shakti Entrepreneurs
To achieve the objective of contributing 15-
20% of HLL‟s revenue by 1lakh entrepreneurs
Education level of indian women and cultural differences in different regions
Not many microfinance companies are interested in rural areas because of low income level of population.
Scaling involves high process costs
More human resource needed to train people to become entrepreneurs and maintain them
Support needed from various sectors of government
Cultural issues like language and communication
Almost 10-15% of
revenues belonged to HR costs, a major concern
Lack of confidence of entrepreneurs to invest because of past failures
Not many SHGs to collaborate with
New markets can be tapped
Even without the direct retail outlet channel final customer can be reached
A more personalized service
Preference to Entrepreneurs
Credit was also given to regulars
iShakti and Shakti Vani created a loyal customer base and improved market penetration as
visibility of HLL‟s products increased
Discounts were given to consumers
Creating a network , passing on part of profit to another person who sells your goods atanother place