Page 163 - DMGT401Business Environment

Business Environment

Notes Concept
The project is a retail/distribution model that HLL established in late 2000 to sell its products
through women self-help groups who operate like a direct-to-home team of sales women in
inaccessible areas where HLL's conventional sales system does not reach.
Strategy for Success

Social Angle: Create "income-generating capabilities for underprivileged rural women by
providing a sustainable micro-enterprise opportunity". To improve rural living standards
through "health and hygiene awareness".

Commercial Angle: Creating opportunities to increase rural family incomes and putting more
money in their hands to purchase the range of daily consumption products, from soaps to
toothpastes that HLL makes. It also enables HLL access to hitherto unexplored rural markets.

Modus Operandi of Project

1. To start, the Shakti woman borrows from her SHG (Self Help Group) and the company
itself chooses only one person. With training and hand-holding by the company for the
first three months, she begins her door-to-door journey selling her wares.
2. A Shakti entrepreneur receives stocks at her doorstep from the HLL rural distributor and
sells direct to consumers as well as to other retailers in the village.

3. Each Shakti entrepreneur services 6-10 villages in the population strata of 1,000 - 2,000
people.
4. Typically, a Shakti entrepreneur sets off with 4-5 chief brands from the HLL portfolio -
Lifebuoy, Wheel, Pepsodent, Annapurna salt and Clinic Plus. Other brands which find
favour with a rural audience are: Lux, Ponds, Nihar and 3 Roses tea.
The women avail of micro-credit through banks. Some of the established Shakti dealers are now
selling 10,000 – 15,000 worth of products a month and making a gross profit of 700 – 1,000
a month. Each Shakti dealer covers 6-10 villages, which have a population of less than 2,000. The
company is creating demand for its products by having its Shakti dealers educating consumers
on aspects like health and hygiene.
A pilot project (christened Project Shakti) was launched in Nalgonda in December 2000 in a
small cluster of 50 villages with 50 SHGs and 3 MACTS (Mutually Aided Co-operative Thrift
Society, a federation of around 20 SHGs).

E-Choupal

"Take a remote village. Go to the smallest farmer there. Educate him in the best farming
techniques. Inform him about daily whether conditions and price movements in the market.
Make available to him at his doorsteps the best possible seeds, pesticides and fertilizers at the
most competitive prices. And when the crop is ready, help him find the best buyer. Sounds
tedious? Imagine doing all this in 30,000 villages across six states season after season, year after
year, that too with profits." (India Today, Dec. 13, 2004)
One fine morning S. Sivakumar, Chief Executive of Agri-business (ITC) approached ITC
Chairman Yogesh Deveshwar with an ambitious idea in 2000. Sivakumar initially requested for
50 Lakh to test the idea among Soya farmers in Madhya Pradesh. Deveshwar granted him
10 crore. The project started with a pilot in June 2000 in Madhya Pradesh with Soybean farmers.

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