CASE 23

Unilever: Working Beyond the Horizon

In Asia, Unilever has championed a number of holistic marketing initiatives that has been replicated in other parts of the world. The company has undertaken a lot of rural marketing initiatives, which have led to sales getting tripled or quadrupled.

POOL WOMEN TO POWER SALES

With its Shakti initiative, Hindustan Unilever Limited (HUL), its Indian subsidiary, pioneered the concept of training local women as sales agents of its products for door-to-door selling in rural areas of India. As of 2016, the initiative had grown to 74,000 sales agents serving 167,000 Indian villages, and HUL had provided them smartphone apps for the sake of managing inventory and other facets of business. The company has tweaked this model for Bangladesh, Vietnam, Sri Lanka, Egypt, and other countries.

In Pakistan, Unilever took the concept to a new height by training hundreds of village women as beauticians. During a three-month program, the women, called Guddi Bajis, or “good sisters,” learn and assimilate ways of applying makeup, shampoo to hair, and provide a bevy of beauty services, in addition to selling Unilever products to their customers. They price their services and earn commissions on those sales. Points are also awarded for incentives such as salon tables or mirrors.

What underlies is the fact that rural women have a high interest in beauty but little access to advice or products. The Guddi Bajis provide that access and help turn out to be brand ambassadors for Unilever products. This kind of social marketing also furnishes income streams for women. The market potential is a huge mass-powerful 4.5 million women in 5,000 villages.

UNDERTAKE GRASSROOTS DISTRIBUTION

Philippines is another nation of small retailers. About 95% of the 1 million retail locations are small variety shops called sari-sari stores. Even with their small size, some stores sell as many as 200 different products, thus accounting for 36% of the country’s fast-moving consumer goods sales.

Unilever recruited some of the larger stores to do double duty as sub-distributors. Owners of the superstores get discounts on Unilever products; the sari-sari stores get better access to prestigious Unilever brands. The superstores also act as venues for fiestas that organizes product demonstrations combined with giveaways with games and entertainment. Unilever organizes about 500 fiestas a year, and the said sales of highlighted brands typically fork up 30-80% during the “fiesta” weeks.

This has reduced distribution costs. They use other direct-distribution channels in Pakistan, Bangladesh, and India to intensify the rural reach of its brands.

OFFER SERVICES FOR RURAL CUSTOMERS

Unilever Thailand launched “Platinum store” campaign to churn out an urban shopping experience to rural customers—an alternative to typical rural stores with limited product or brand offerings. Unilever assists the layouts, develops promotions, and brings in partner companies for services such as ATMs. The stores must meet certain requirements, including assuring high-visibility displays for Unilever products. The Platinum stores get more customer footfalls and consequent revenue.

This initiative has helped Unilever manage competitors like 7-Eleven, which has been registering briskly in urban regions. Sales at Platinum stores were booming at triple the rate of the channel overall, as per reports.

CREATE NEW CHANNELS FOR ADVERTISING

One challenge in tapping the rural market is how to reach consumers in remote areas with limited electricity and little access to mass media.

In India, Hindustan Unilever has used mobile technology to create audio entertainment for rural areas by adapting a common practice among frugal cellphone users—the missed call. In 2011, HUL used the tactic in a pilot promotion for its Active Wheel detergent in a few of India’s poorest rural areas. Customers were asked to call a number that cut off after two rings so it cost them nothing. An automatic free callback provided some comic dialogue from Bollywood star Salman Khan and ads for Wheel. In four months, HUL got 17 million calls and Wheel sales went up by 300% in the region.

DESIGN PRODUCTS (AND SET PRICES) FOR RURAL CONSUMERS

Years ago, HUL pioneered the use of low-cost, single-use packets to make its products affordable for low-income groups who are at the bottom of the pyramid. Now these packets are ubiquitous in both developed and developing countries. HUL itself sells 28 billion sachets a year.

In the Philippines, it turned out to be the answer to increasing rural sales of the company’s Rexona deodorant. Unilever faced a tough challenge—only half of Filipinos buy deodorant, and standard package sizes were expensive for rural consumers. To gain market share, Unilever developed a cream version in a single-use-sized packet that costed much less.

TRAIN MANAGERS TO ADOPT A RURAL MINDSET

Underlying HUL’s success in rural India is a project that necessitates managers to compulsorily spend a month of their first year of work living in a village. Ten countries in Asia and Africa are inhabited by about 2.3 billion rural people. Rural markets have presented a huge marketing opportunity due to government projects, remittances coming from rural migrants, and extensive participation of NGOs and social organizations in cultivating better farming and sustainable living skills. Increasing penetration of mobile phones, internet, and satellite TV is making these rural consumers demand aspirational products and services. Urban markets are witnessing a hot bed of competition with little scope of growth. Holistic companies like Unilever are adapting their inclusive growth strategies for rural consumers as part of their future plans for growth and expansion.

In India, Lifebuoy’s “Swasthya Chetna” (LSC) has been a five-year health and hygiene education program launched by HUL. The program was formally launched in 2002, in eight states across India.

The objective of this program was to impart knowledge to 200 million people across rural and urban areas of India. Adopting good “health and hygiene” practices was the credo. It was ostensibly to spread awareness about germs and their adverse effects on health. Basic mantra was bathing and washing hands with soap that can prevent diseases like diarrhea.

According to HUL, these are not a social activity, but a marketing strategy with a tinge of social benefit. HUL sought to grow the Lifebuoy brand in India by attracting those consumers who never used soap. Through this campaign, the company wanted to evoke a behavioral change by stating that people to use soaps more often, thus creating more users (customers)for its brand. This activity was also a prelude to successful public–private partnership.

These initiatives, called “Pledge Programmes”, have now fanned out in many countries and regions across the globe.

PROMOTING HEALTHY BODY IMAGES

Unilever has own standards for healthy body images. Since 2007, the company is bent on preventing the use of “size zero” models or actors in their advertising. This is to ensure that product advertisements do not promote “unhealthy” body types. All brand directors and agencies are expected to use models and actors with a Body Mass Index (BMI) of between 18.5 and 25 as a standard watchword. This is in consonant with the World Health Organization’s benchmarks on what level of BMI can be considered healthy.

The company’s charter says:

• Committed to building trust through responsible practices and total transparent communication—both directly to consumers and indirectly through other key stakeholders and thought-leaders
• Committed to ensure that our products are safe and that we provide clear information on their use and any risks thereof with use
• Committed to support a consumer’s right to know what is in our products and will be transparent in terms of ingredients, nutrition values, and the health and beauty properties of our products
• Committed to leverage a combination of channel that includes product labels, websites, careline phone numbers, and/or consumer leaflets to communicate openly with global consumers

RESPONSIBLE MARKETING AND ADVERTISING

The company, in retrospect, is committed to responsible marketing and advertising. As a leading global consumer goods company, they promote the benefits of products and product innovations using many different channels of brand communication. For example:

• Dove’s campaign for Real Beauty challenges current stereotype concepts about beauty.
• Omo/Persil’s “Dirt is good” campaign pitches getting dirt as a natural and positive part of the learning and development process for children.
• With less saturated fat than butter, Flora/Becel helps people look after themselves by offering healthy, nutritious, and tempting tasting products that can be enjoyed at any meal time.
• Comfort One Rinse’s campaign points out to consumers that they only need one bucket of water for rinsing their clothes rather than three, thus helping them to conserve water.

At the same time, the company ensures that the baseline test of being “legal, decent, honest, and truthful” is followed for all its ads.

Source: Unilever website.

DISCUSSION QUESTIONS

1. What are the factors that were considered by Unilever to launch social marketing projects-India and elsewhere?
   1. A customer focus: A genuine curiosity, even hunger, to know what the potential customer thinks and feels
   2. Planning process. Deep understanding of target audience, nurture their needs, to know current and specific knowledge, beliefs, attitudes, and practices towards products and needs
   3. Barriers to reach target audience: What they have to give up in order to perform desired behavior? What concerns they have regarding behavior? Can they change, and do it? Why have not they done in the past? These factors can be thought of as the “costs” the target audience perceives.
   4. Benefits that can accrue: What will they get if they perform the desired behavior? How likely do they think it is that they will get this? What exactly do they want to get? These are potential “motivators” for the target audience.
   5. Competition exists: What type of behavior are they doing instead? Why it is so? What benefits do they perceive in competing offers? How much does this cost? How does it compare with other offers?
   6. Influential others. Relative to the company’s desired behavior, who does your target audience listen to most? Are influential others engage in this desired behavior? What are they saying, or likely to say, to your target audience about this behavior?
2. Does this socially oriented marketing have to use all 4 Ps in order to usher a change in the behavior of target consumers?
   1. No, but this is best practice. Efforts will be more successful when the company does so. All the 4Ps are necessary to surpass audience barriers, increase benefits, and upstage the competition.
   2. A winning strategy requires an integrated approach. It demands all tools relevant. It is not just relying on advertising and other persuasive communication. Strategies must be tailored to unique needs, wants, resources, and current behavior of differing market segments.
3. Does there have to be a narrowly defined and targeted audience segment?
   1. No. But again, this is also a best practice, based on few homogeneous segmental behavior. Different segments within a particular population have different barriers and benefits sought. It requires different interventions.
   2. The target segment must perceive benefits that equal or exceed the perceived costs they associate with performing the desired behavior.
   3. It benefits the target segment as well as the society. It is an exchange deal (Lee and Kotler, 2011).
4. Is communication-only campaign a social marketing campaign?
   1. It may be.
   2. A campaign that uses only words meets the criteria for a social marketing effort. However, it is more likely to be successful if other influence tools are used as well (demonstration).
5. Should there be a plan for social diffusion?
   1. Social diffusion is a model that describes the diffusion or spread of an idea or behaviour through a population.
   2. This is a “natural” force and requires diffusion of the desired behavior.
   3. Successful campaigns establish ways to measure progress and make adjustments to support current or planned objectives and resultant strategies.
6. What approach should be chosen?
   1. Segments need to be set in a priority order.
   2. A disproportionate amount of resources should be allocated to most effective segments.
   3. Target audience (markets of greatest opportunity) emerge as those with greatest need for action.
   4. Targets should be the best match for the organization.
7. How to assess measures for target audience reach and performance?
   1. Utmost need: size, incidence, severity, and helplessness.
   2. Most ready to receive: ready, willing, and able to respond
   3. Easiest to reach: identifiable, venues for distribution channels, and communicate.
   4. Best match: In terms of organizational mission, expertise, and resources.
   5. Additional segments can be reached over time.