Abridged version of Article Published in Mint, 25th March, 2009 by Rajeshwari Sharma
How do you sell cooking gas to consumers who are convinced the gas will seep into the food and eventually find its way into their stomachs? That’s no laughing matter. That is the kind of consumer mindset marketing professionals often have to overcome in rural areas. Cultural and economic diversity, geographically dispersed markets, poor infrastructure and inaccessibility to conventional media pose other challenges.
Make it relevant
Rural consumers are different from their urban counterparts in purchase behaviour and consumption patterns. They are more inclined towards utility, convenience and value for money, experts say. Marketeers, therefore, should avoid replicating the urban strategy of selling lifestyle or indulgence to consumers in rural areas. In many product categories, including household and consumer care products, rural consumers prefer buying in small units and avoid bulk purchases. Keeping the utility factor in mind, the farm equipment division of Mahindra and Mahindra Ltd (M&M) has launched a fuel-efficient tractor, Shaan, complete with a trolley that helps both in farming and transportation. “We found that this model works well for brick kilns and we have been aggressively pushing Shaan for brick kilns in Uttar Pradesh, Bihar and some parts of Haryana,” says Sanjeev Goyle, senior vice-president, farm equipment sector, M&M.
Price it right While incomes in rural India have been rising over the past few years, they are still not comparable with those in urban India. Low income levels and a conservative attitude make consumers resist expensive purchases.
In 2002, Coca-Cola India Pvt. Ltd launched 200ml bottles priced at Rs5 to push consumption in price-sensitive rural markets. The experiment prompted many other companies to adopt a low unit price strategy. LG introduced low-priced television sets Sampoorna and CinePlus for rural markets. It also has refrigerators, washing machines and microwave ovens targeted at price-sensitive consumers. Companies need to bear in mind that the rural consumer seeks better value for money and is interested in tangible benefits compared with an urban consumer. Take, for instance, the greater market share of Hindustan Unilever Ltd’s (HUL) Clinic Plus shampoo over CavinKare Pvt. Ltd’s Chik shampoo, though CavinKare set the sachet trend popular in rural India, and Britannia Industries Ltd’s Tiger brand of biscuits over Parle Products Pvt. Ltd Parle G. Says Goyle: “One of the learnings that we have had from rural India is that customers are looking at better product and service utilization. He (the rural consumer) is clearly seeking value-added products and services with multifarious usage.” Based on such insights, M&M introduced servicing camps with the slogan “Swasthya tractor, swasthya chalak” (healthy tractor, healthy driver) a year ago. The camps offer a free health check-up for drivers while their tractors are being serviced.
Rural customers are clearly making marketeers think hard about ways and means to serve them optimally. “The future will see an increasing number of companies coming together to create products, services and infrastructure for bringing down costs and passing on the benefit to customers,” says Roopesh Kajrolkar, head of marketing, rural micro banking and agribusiness group, ICICI Bank Ltd.
Distribution strategy
According to MART’s estimates, there are at least 600,000 villages in the country and 4,738 towns that may be classified as semi-urban. While infrastructure has improved, it is still far from adequate in reaching most places. “You may have the best of the product with excellent packaging and perfect pricing but unless it is made available to people, it will serve no purpose,” says Singhal. “Reach and penetration of most companies, other than the likes of HUL, is poor. Availability is still a big challenge,” he adds. Rural customers are making marketeers think hard about ways to serve them optimally. Several companies have adopted innovative strategies to reach their target groups. ICICI Lombard, for instance, has tied up with dairy companies such as Hatsun Agro Products Ltd in Chennai and Raja Ram Babu Dairy in Maharashtra to piggyback on their distribution channels to sell its cattle insurance policies. “We have also tied up with banks which offer loans for cattle purchase to tie the loan offering with our cattle insurance scheme,” says Prashad. Godrej Consumer Products Ltd (GCPL) adopted its own strategy. “In inaccessible villages, we use weekly rural haats (markets), melas (fairs) and religious congregations as a platform to introduce our product range,” says Rakesh Kumar Sinha, chief operating officer, GCPL. “This has proved to be very effective in states including Uttar Pradesh, Madhya Pradesh, Chhattisgarh and Haryana.” To counter issues such as shortage of electricity and the inability of several retailers to invest in refrigerators, beverage maker Coca-Cola India is providing them low-cost ice boxes to store its drinks.
Media
Unlike urban markets, a majority of rural India still has no access to traditional media platforms such as television and newspapers. Most national publications are not available in rural markets, and even the regional media is accessed by only around 6% of the rural population. This makes the exercise of communicating with rural consumers and making them aware of products and services extremely challenging, experts say. For its Shakti brand of corrugated galvanized sheets, Tata Steel Ltd uses the words chaddar, teena and khadag to denote corrugated sheets in various rural markets, depending on the local dialect. In the absence of mass media, most marketeers active in rural India use local mediums such as roadshows, outdoor advertising, fairs and weekly bazaars, among others. Radio is also a cost-effective medium favoured by many companies. Innovation, in this respect, need not be always about big changes. For ICICI Bank, a simple innovation such as placing the lifesize dummy of a cow mounted on a branded van worked well in plugging cattle purchase loans in a programme called Kamdhenu. “A lot of strategies have to be built around cost because speed of reach and response generated through traditional media vehicles have failed to justify the cost,” says Kajrolkar.
Thursday, March 26, 2009
Motorcycle Diaries
Published in Mint on 26th March, 2009, by Samar Shrivastava
Sawai Madhopur, Rajasthan: At his Hero Honda Motors Ltd dealership in the agricultural town of Bonli in Rajasthan, Girirad Prasad Gupta has kept the most important job in the family. Son Manoj Kumar Gupta is his rural sales executive.
Listen NowAt 28, Manoj Gupta already has a weather-beaten face. Ask him more about his job, and you begin to understand why.
Setting off at 7 each morning, he maintains a gruelling schedule. Riding his Hero Honda bike across small towns and villages around Bonli, in Sawai Madhopur district, he meets community leaders, including the localsarpanch (village head), schoolteachers, lawyers, doctors and insurance agents— anyone who plays a role in shaping buying decisions in their vicinity.
He makes it a point to visit every village within 10km of the dealership at least once a month. Armed with pamphlets and brochures on Hero Honda bikes, he is ready to answer any questions on the products he sells.
Navin Gaur, Rural Sales Executive at Hero Honda’s Sawai Madhopur dealershipBut unlike a regular salesman, Manoj Gupta doesn’t make an aggressive sales pitch during these visits. He is mostly content sitting and chatting with village folk. “Making a sale is great, but we aim to form a long-term relationship,” he says.
Rural sales ride more on word of mouth publicity than advertising, and Manoj Gupta says it’s more important to be seen as a friend of the villagers than as a bike salesman. “If they don’t buy from me today, that’s fine. I need to make sure they think of me next year when they’re planning on buying a bike,” he says.
The 521 rural sales executives on the rolls of Hero Honda dealers across the country have been instrumental in making its marketing campaign, “Har gaon, har aangan” (Hindi for every village, every home), a success. They are the company’s face across small towns such as Bonli, and have helped its dealerships win business.
Looking villagewards
Safely ensconced in the No.1 spot among motorcycle makers for the past eight years, it was only in 2007 that Hero Honda decided to focus on sales in rural areas by setting up a dedicated rural division. “We didn’t want to be complacent with our leadership position and started exploring what more we could do,” says Anil Dua, senior vice-president of sales and marketing at Hero Honda.
Hero Honda’s rural division was formed with the aim of penetrating deeper into small towns and villages across India. These are generally defined as settlements with a population of at least 20,000. For Hero Honda, the share of rural sales has been growing by 2-3 percentage points every year; rural areas make up at least 40% of the company’s sales.
While nearly one-fourth of India’s urban households own a scooter, motorcycle or moped, only 8% of rural households do so, according to the National Sample Survey Organisation, or NSSO
Increased procurement prices for agricultural commodities offered by the government and the National Rural Employment Guarantee Act, promising a minimum 100 days of work every year to at least one adult member of each poor rural household, have put more money in the hands of rural consumers.
And Hero Honda is in place to take advantage of the increase in rural disposable incomes. “They have positioned themselves as a rural India story,” says S. Ramnath, vice-president at IDFC-SSKI Securities Ltd. “At just the right time.”
As two-wheeler sales across the country have slowed, the focus on rural areas has stood Hero Honda in good stead. The company has grown 12% so far this fiscal, while rival Bajaj Auto Ltd has seen sales fall by 23%.
Logistical nightmare
In the past two years, Hero Honda has increased the number of touch points, or outlets selling and servicing its bikes, from 2,000 to 3,000. This year’s aim: to reach 3,500 touch points.
Places such as Sawai Madhopur, with a population of about 200,000, present a unique challenge for Hero Honda. How does one keep the dealerships profitable and overcome the logistical nightmare of catering to more than 3,000 individual dealers and their representatives across the country? Such problems have deterred even car makers such as Maruti Suzuki India Ltd, the country’s largest, from setting up shop in Sawai Madhopur (Maruti Suzuki has a booking counter).
Pitch perfect: Brijesh Sharma (extreme right), who oversees Hero Honda’s safety initiative for Sawai Madhopur in Rajasthan, shares engine maintenance tips with Rajendra Prasad Mangal. Harikrishna Katragadda / MintHero Honda’s dealerships in districts such as Sawai Madhopur are based on the so-called hub-and-spoke model. Within a district, the company’s main liaison is the dealer, typically located in the district headquarters. Under him are “authorized representatives”—smaller dealerships where locals can make purchases and also get their bikes serviced. “We realized that while someone might be willing to travel 50km to buy a bike, they don’t like to do that every time they need to get it serviced,” says Sandeep Mukherjee, sales manager at Hero Honda’s all India rural division.
Vijay Motors in Sawai Madhopur has 10 authorized representatives scattered across the district. Sandeep Aggarwal, its owner, is constantly in touch with them, running promotional activities in villages, holding service camps and helping them tie up with banks for financing and so on.
“Dealers understand their area the best, and so we leave local activities to them,” says Akhilesh Sharma, Hero Honda’s sales manager in Rajasthan. “The company does provide broad guidelines,” he adds.
Aggarwal, for instance, noticed that prospective buyers would scout around in the belief that they may be able to get a better price at another dealership. To counter this tendency, he has put up in excess of 500 price lists across his district at places such as tea shops, the village tailor and the panchayat (village council) office. “It’s very important to convince village buyers that there’s no better deal available,” he says.
Cutting costs
In adapting its model for rural India, Hero Honda has also cut costs wherever possible.
Walk into one of the 10 dealer shops across Sawai Madhopur and the stark difference from a city showroom is noticeable. At Girirad Prasad’s Gupta Motors, there is none of the glitz of a city showroom.
The entrance is through a cramped room that doubles up as a front office. Inside, the bikes are placed in a small room with whitewashed walls and the heat is almost stifling.
A visitor at a sales camp organized by the company at the Kirni village panchayat office; and bikes on display at the event. Harikrishna Katragadda / MintBuyers are left free to walk around, touch and feel the bikes, and are rarely pushed into a sale unless they express interest. But step into the workshop and the picture changes. The company has spared no effort in setting up a neat, clean and efficient workshop.
Keeping costs low is key to running a profitable business, says Gupta. He sells between 20 and 25 bikes a month, and makes most of his money on servicing them. An initial investment of Rs15 lakh to set up his outlet nets him about Rs3 lakh in profit each year. He couldn’t have made this much in any other business in his town, he says.
Bonli being an agricultural town with few investment avenues, bank fixed deposits are the preferred choice for most people to park their savings.
At Kirni village, Aggarwal is holding a promotional event.
A few bikes have been trucked in for the day and are on display at the panchayat office. Villagers take them for test drives and ask Navin Gaur, a rural sales representative, questions on the products. Rajendra Prasad Mangal, 29, who owns a medical shop and is on a tight budget, asks which bike would be best for his needs. Gaur suggests he stick to a 100cc bike as it’s the most fuel efficient.
A few feet away, Brijesh Sharma, who oversees the company’s safety initiative for the district, explains why bike riders must always wear a helmet. He also lays out a few tips on engine maintenance, the best way to shift gears and signalling while turning.
Creating goodwill
Activities such as the one in Kirni have contributed to building goodwill between village folk and the company.
After waiting for almost a year, insurance agent Vishnu Kumar bought a Hero Honda Splendor Plus last month. He says the frequent service camps the company organizes at Kirni played a major role in making up his mind. “Other companies never do this, and we know Honda (Hero Honda) won’t abandon us,” he says.
Kumar has seen his business double after he bought his Splendor. “I can now take my clients to Sawai Madhopur and back when they need to purchase their insurance policies,” he says.
With at least 100 people mulling around the small panchayat office and its grounds, Rajendra Prasad Singhal has dropped by to find a buyer for his used bike. Over the years he has bought eight Hero Honda motorcycles and says he plans to buy another one once he finds a buyer for his Passion Plus. Unable to get his asking price of Rs38,000, he leaves empty-handed.
Back in Bonli, a Bajaj Auto dealership bears an almost deserted look. The owner, Govind Bajaj, sells as many as 15 bikes a month and says that his business has fallen in the last few months because banks stopped giving out loans to bike buyers (most Hero Honda buyers prefer to pay in cash).
Unlike his counterparts at Hero Honda, he doesn’t travel outside Bonli to market his motorcycles to buyers. “We keep telling the company to assist us in such activities but they don’t listen to us,” he says.
More competition could give Hero Honda a run for its money. For some such as Hajji Suleman Khan, working on his farmland an hour north of Sawai Madhopur, Hero Honda is now the preferred choice. Asked what attracts him to the company, he says, “Sir, it’s the only name I’ve ever heard of.”
Tuesday, March 24, 2009
Unilever's Project Shakti : Innovative Rural Marketing Schemes
What worries Gita Devi most about her business is not the economic slowdown but the tea that her neighbours are drinking. “They’re drinking City Gold and Tata Tea,” she tells Dharmender Mishra, her supervisor. “And they sing their praises. Why don’t they like Brooke Bond then?”
“Maybe we should plan a tea party for them,” Mishra says.
“Maybe,” Gita Devi replies, looking uncertain.
“We’ll do the tea party—we’ll do some sampling and a demonstration,” Mishra says, reassuring her.
It’s important for Gita Devi that her neighbours drink Brooke Bond. Gita Devi is Hindustan Unilever Ltd’s (HUL’s) chief salesperson for her village of Khurrampur and the nearbyvillage of Shalimarbad, and one of at least 45,000 village entrepreneurs enrolled in Project Shakti, the rural marketing initiative of the country’s biggest home products maker.
If the neighbours of all those entrepreneurs—or Shakti ammas (literally, “mother”, a respectful way to address women), as they’re called—drink Brooke Bond, bathe with Lifebuoy and plump for HUL’s other consumer goods, it will bear out Project Shakti’s promise: to cultivate the vast markets of rural India, sourcing saleswomen from the very villages that it hopes to tap.
Project Shakti was launched in Andhra Pradesh’s Nalgonda district in 2001, and it has swept the country with such success that Anglo-Dutch multinational firm Unilever is now customizing it to rural markets in Sri Lanka, Bangladesh and Vietnam. In 15 states, it has worked with self-help groups and non-governmental organizations to identify underprivileged women and train them to be saleswomen. Its timing has been fortunate: Its operational run has coincided almost exactly with a decade-long rise in rural India’s purchasing power, the last two years yielding a particularly rapid rate of growth.
Analysts agree that rural markets will prove more resilient to the simmering global economic trouble. “Compared to last year, rural FMCG sales have grown at 6-8% over the last couple of months, while urban sales have grown at 4%,” says Debashish Mukherjee, a principal at AT Kearney in New Delhi. “For many of these FMCG companies, rural markets contribute 40-50% of revenues, which is very impressive.”
HUL is one of the few companies that could have pulled off Project Shakti, says Pradeep Lokhande, founder of Rural Relations, a consumer relations firm. “It was possible because they have a basket of products to sell,” he says. “Another issue is cost—HUL has small packs, and they can push that so that the rural consumer can afford it.” (HUL says it does not track Project Shakti’s contribution to its profits, although a spokesperson says that it has “played an important role in growing rural markets for HUL”).
On average, a Shakti amma records monthly sales of Rs10,000, on which she earns Rs600-800; those earnings come out of a 3% discount that HUL gives her on its products, as well as a trade margin of approximately 10%. A really outstanding Shakti amma—a Diamond Shakti amma—can even book Rs30,000-40,000 of sales every month, often turning her house into an HUL store.
The ideal Shakti amma candidate is probably Rojamma, the woman from an Andhra Pradesh village who stars in her own 6-minute film on the HUL website. Abandoned by her husband, and with two young daughters to raise, Rojamma was rescued from that cinematically dire life by Project Shakti. “Everybody knows me, I am someone now,” a voice-over says on her behalf, “And I can have big dreams.”
Gita Devi’s situation wasn’t quite as precarious when she became an amma three years ago; her husband drives a tractor, and she joined to supplement that income and to better care for her five daughters and one son.
“I was able to pay for my daughter’s sewing classes,” she says, indicating a girl who, ill with typhoid and hooked up to an intravenous line, smiles feebly from a bed. “I also bought that television,” she adds, pointing to a set perched high in one corner, above a poster for the Mimoh Chakraborty film Jimmy.
In a room at the back, next to portraits of assorted deities and another, smaller poster of Jimmy, is Gita Devi’s stock of HUL products: soaps, shampoos, washing powder, lotions and creams. “I sell regularly to 70 houses in this village, and 50 houses in the next, so I visit those home-to-home once a week,” she says. “Otherwise, I go out for an hour every morning to new houses...to convince them not to buy from anywhere else.”
This routine would ordinarily be inefficient and time-consuming, but in a village where the Shakti amma knows everybody—knows what they can afford to buy and when they buy—and where everybody knows her, the inefficiencies fall away. “I can just go up on my roof and call out to Gita Devi, and she’ll come over and give me what I want,” says Krishna Sharma, a housewife next door.
Earlier, Sharma made the trek to Muradnagar, at least 12km away, to shop. “There were small kirana stores in this village, but they had no range,” she says. “They didn’t have this, for instance”—she pulls a Pears soap bar out of Gita Devi’s bag—“or this”—iodized salt.
Every 15 days, on such visits, Gita Devi is accompanied by Mishra, who as a Shakti trainer helps his wards pitch HUL to prospective customers. Mishra supervises 25 Shakti ammas, helping them keep records, listening to their problems, and liaising with rural distributors; he and 40-odd other trainers are managed, in turn, by one of Uttar Pradesh’s 14 rural sales officers. Gita Devi is thus FMCG’s equivalent of last-mile connectivity.
Mishra’s rural sales officer, P.K. Aggarwal, lives in Ghaziabad but makes village runs nearly every day, monitoring the network of Shakti trainers and ammas under him. Earlier, he worked with Project Shakti in eastern and central Uttar Pradesh, and he calls the state’s western segment “far better off”.
“The average income of a family in this belt is around Rs3,000 per month, and I’ve seen that rise by 6% or 7% in the last year and a half,” Aggarwal says, adding that four out of every five of the villages’ households are engaged in some way in wheat cultivation. Ghaziabad is one of the state’s most prosperous districts, a sign of which is that the number of households in the district demanding employment under the National Rural Employment Guarantee Act is one of the three lowest in Uttar Pradesh.
To do business in rural India is not a cheap alternative. Apart from orienting an urban-centric supply chain to access smaller villages, companies have to accept that rural consumers often have illogical or impenetrable loyalties. “Rural consumers are a more sensitive to getting value for their money, especially with consumer goods,” Lokhande says. “Now a secondary school student is an opinion leader. He knows what he wants, and his parents will listen to him.”
HUL learned very early that Shakti ammas should be encouraged to sell to retail shops as well as homes if they were to feel optimistic about their earning potential. “We also advise our Shakti ammas not to sell on credit,” says Prashant Jain, an area sales and customer manager for central Uttar Pradesh (rural) with HUL. “Recovery is sometimes difficult, because many of these customers are also relatives or known to her in the village, so they feel embarrassed to ask for money. So we advise them to sell (for) cash only.”
Another lesson rose out of Project Shakti’s logistics. Jain describes how HUL initially thought it viable to only target villages with a population of 2,000 or more, how market strategists sat down with census lists, and how ammas were found in those selected villages and started off with a minimum of Rs10,000 worth of stock.
When HUL started delivering stock to these ammas twice a month, however, it realized that it was also in its best interests to cultivate Shakti ammas in the villages that lay along that route, however small they were. “Even if we are just dropping off stock worth Rs1,000 or Rs2,000 at these villages on the way, it makes economic sense,” Jain says.
Some of the ammas’ problems require unorthodox solutions. Last year, Roshni, a Shakti amma in a neighbouring village called Dhindaar, found that her customers were dissatisfied with the effects of the Fair & Lovely she sold them. So she organized a seminar devoted to showing the women the correct way to use Fair & Lovely—what her Shakti trainer, Jitendra Kumar, calls the “aath ka funda”, the method of daubing spots of the cream in a figure of eight on the face, and then massaging it in. “And now it sells much better,” Roshni says.
The Fair & Lovely seminar was similar to the tea party that Gita Devi and Mishra are planning for Khurrampur—a marketing event to help persuade their audience to buy Brooke Bond tea. It’s a sound idea, although Jain admits that to replicate such events across a state as large as Uttar Pradesh can prove costly, and the returns are not always commensurate with that expense.
“But, more importantly, as a businesswoman, she needs marketing support. Having given her the business, it is my duty to give her the marketing support she needs as well,” Jain says. “The good thing is that she’s coming out and asking for it—she’s not passive, she wants to actively sell. That’s the most heartening part of it all.”
“Maybe we should plan a tea party for them,” Mishra says.
“Maybe,” Gita Devi replies, looking uncertain.
“We’ll do the tea party—we’ll do some sampling and a demonstration,” Mishra says, reassuring her.
It’s important for Gita Devi that her neighbours drink Brooke Bond. Gita Devi is Hindustan Unilever Ltd’s (HUL’s) chief salesperson for her village of Khurrampur and the nearbyvillage of Shalimarbad, and one of at least 45,000 village entrepreneurs enrolled in Project Shakti, the rural marketing initiative of the country’s biggest home products maker.
If the neighbours of all those entrepreneurs—or Shakti ammas (literally, “mother”, a respectful way to address women), as they’re called—drink Brooke Bond, bathe with Lifebuoy and plump for HUL’s other consumer goods, it will bear out Project Shakti’s promise: to cultivate the vast markets of rural India, sourcing saleswomen from the very villages that it hopes to tap.
Project Shakti was launched in Andhra Pradesh’s Nalgonda district in 2001, and it has swept the country with such success that Anglo-Dutch multinational firm Unilever is now customizing it to rural markets in Sri Lanka, Bangladesh and Vietnam. In 15 states, it has worked with self-help groups and non-governmental organizations to identify underprivileged women and train them to be saleswomen. Its timing has been fortunate: Its operational run has coincided almost exactly with a decade-long rise in rural India’s purchasing power, the last two years yielding a particularly rapid rate of growth.
Analysts agree that rural markets will prove more resilient to the simmering global economic trouble. “Compared to last year, rural FMCG sales have grown at 6-8% over the last couple of months, while urban sales have grown at 4%,” says Debashish Mukherjee, a principal at AT Kearney in New Delhi. “For many of these FMCG companies, rural markets contribute 40-50% of revenues, which is very impressive.”
HUL is one of the few companies that could have pulled off Project Shakti, says Pradeep Lokhande, founder of Rural Relations, a consumer relations firm. “It was possible because they have a basket of products to sell,” he says. “Another issue is cost—HUL has small packs, and they can push that so that the rural consumer can afford it.” (HUL says it does not track Project Shakti’s contribution to its profits, although a spokesperson says that it has “played an important role in growing rural markets for HUL”).
On average, a Shakti amma records monthly sales of Rs10,000, on which she earns Rs600-800; those earnings come out of a 3% discount that HUL gives her on its products, as well as a trade margin of approximately 10%. A really outstanding Shakti amma—a Diamond Shakti amma—can even book Rs30,000-40,000 of sales every month, often turning her house into an HUL store.
The ideal Shakti amma candidate is probably Rojamma, the woman from an Andhra Pradesh village who stars in her own 6-minute film on the HUL website. Abandoned by her husband, and with two young daughters to raise, Rojamma was rescued from that cinematically dire life by Project Shakti. “Everybody knows me, I am someone now,” a voice-over says on her behalf, “And I can have big dreams.”
Gita Devi’s situation wasn’t quite as precarious when she became an amma three years ago; her husband drives a tractor, and she joined to supplement that income and to better care for her five daughters and one son.
“I was able to pay for my daughter’s sewing classes,” she says, indicating a girl who, ill with typhoid and hooked up to an intravenous line, smiles feebly from a bed. “I also bought that television,” she adds, pointing to a set perched high in one corner, above a poster for the Mimoh Chakraborty film Jimmy.
In a room at the back, next to portraits of assorted deities and another, smaller poster of Jimmy, is Gita Devi’s stock of HUL products: soaps, shampoos, washing powder, lotions and creams. “I sell regularly to 70 houses in this village, and 50 houses in the next, so I visit those home-to-home once a week,” she says. “Otherwise, I go out for an hour every morning to new houses...to convince them not to buy from anywhere else.”
This routine would ordinarily be inefficient and time-consuming, but in a village where the Shakti amma knows everybody—knows what they can afford to buy and when they buy—and where everybody knows her, the inefficiencies fall away. “I can just go up on my roof and call out to Gita Devi, and she’ll come over and give me what I want,” says Krishna Sharma, a housewife next door.
Earlier, Sharma made the trek to Muradnagar, at least 12km away, to shop. “There were small kirana stores in this village, but they had no range,” she says. “They didn’t have this, for instance”—she pulls a Pears soap bar out of Gita Devi’s bag—“or this”—iodized salt.
Every 15 days, on such visits, Gita Devi is accompanied by Mishra, who as a Shakti trainer helps his wards pitch HUL to prospective customers. Mishra supervises 25 Shakti ammas, helping them keep records, listening to their problems, and liaising with rural distributors; he and 40-odd other trainers are managed, in turn, by one of Uttar Pradesh’s 14 rural sales officers. Gita Devi is thus FMCG’s equivalent of last-mile connectivity.
Mishra’s rural sales officer, P.K. Aggarwal, lives in Ghaziabad but makes village runs nearly every day, monitoring the network of Shakti trainers and ammas under him. Earlier, he worked with Project Shakti in eastern and central Uttar Pradesh, and he calls the state’s western segment “far better off”.
“The average income of a family in this belt is around Rs3,000 per month, and I’ve seen that rise by 6% or 7% in the last year and a half,” Aggarwal says, adding that four out of every five of the villages’ households are engaged in some way in wheat cultivation. Ghaziabad is one of the state’s most prosperous districts, a sign of which is that the number of households in the district demanding employment under the National Rural Employment Guarantee Act is one of the three lowest in Uttar Pradesh.
To do business in rural India is not a cheap alternative. Apart from orienting an urban-centric supply chain to access smaller villages, companies have to accept that rural consumers often have illogical or impenetrable loyalties. “Rural consumers are a more sensitive to getting value for their money, especially with consumer goods,” Lokhande says. “Now a secondary school student is an opinion leader. He knows what he wants, and his parents will listen to him.”
HUL learned very early that Shakti ammas should be encouraged to sell to retail shops as well as homes if they were to feel optimistic about their earning potential. “We also advise our Shakti ammas not to sell on credit,” says Prashant Jain, an area sales and customer manager for central Uttar Pradesh (rural) with HUL. “Recovery is sometimes difficult, because many of these customers are also relatives or known to her in the village, so they feel embarrassed to ask for money. So we advise them to sell (for) cash only.”
Another lesson rose out of Project Shakti’s logistics. Jain describes how HUL initially thought it viable to only target villages with a population of 2,000 or more, how market strategists sat down with census lists, and how ammas were found in those selected villages and started off with a minimum of Rs10,000 worth of stock.
When HUL started delivering stock to these ammas twice a month, however, it realized that it was also in its best interests to cultivate Shakti ammas in the villages that lay along that route, however small they were. “Even if we are just dropping off stock worth Rs1,000 or Rs2,000 at these villages on the way, it makes economic sense,” Jain says.
Some of the ammas’ problems require unorthodox solutions. Last year, Roshni, a Shakti amma in a neighbouring village called Dhindaar, found that her customers were dissatisfied with the effects of the Fair & Lovely she sold them. So she organized a seminar devoted to showing the women the correct way to use Fair & Lovely—what her Shakti trainer, Jitendra Kumar, calls the “aath ka funda”, the method of daubing spots of the cream in a figure of eight on the face, and then massaging it in. “And now it sells much better,” Roshni says.
The Fair & Lovely seminar was similar to the tea party that Gita Devi and Mishra are planning for Khurrampur—a marketing event to help persuade their audience to buy Brooke Bond tea. It’s a sound idea, although Jain admits that to replicate such events across a state as large as Uttar Pradesh can prove costly, and the returns are not always commensurate with that expense.
“But, more importantly, as a businesswoman, she needs marketing support. Having given her the business, it is my duty to give her the marketing support she needs as well,” Jain says. “The good thing is that she’s coming out and asking for it—she’s not passive, she wants to actively sell. That’s the most heartening part of it all.”
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