The Hindu : Business : Hindustan Lever reinventing distribution, says Banga

Online edition of India's National Newspaper
Wednesday, Jun 30, 2004

Business

Business

Hindustan Lever reinventing distribution, says Banga

By Ramnath Subbu

MUMBAI, JUNE 29. Hindustan Lever Ltd. (HLL) is reinventing its distribution system by redefining the approach to current channels and creating new channels. The objective is to touch consumers with a three-way convergence of product availability, brand communication and higher levels of brand experience, said HLL Chairman, M. S. Banga, while addressing shareholders at the company's annual general meeting here today.

"We are reinventing distribution — creating new channels and redefining the way current channels are services. We are building key capabilities in training the large number of people involved in these initiatives. Through all these initiatives, we are getting our brands closer to the consumer."

In redefining the approach to current channels, HLL has firstly segmented the general trade, and now addresses each channel — grocery stores, chemists, wholesale, kiosks and general stores — with a differentiated mix of services. HLL is also emphasising on making brands prominently visible in the crowded stores. Greater interaction being key to touching consumers, HLL is using the point-of-purchase for a much higher level of direct contact, through in-stores facilitators, sampling, education and experience.

Second, HLL developed customer management and supply chain capabilities for partnering the emerging channel of self-service stores and supermarkets. Customer activation to drive trial and preference for HLL brands is another key thrust area. This is being achieved through initiatives like in-store promotions and sampling of products.

The company is creating a whole set of new channels, across all consumer segments in both urban and rural India. Project Shakti, a new channel is already operational in 11 States. The vision is to reach over one lakh small villages touching over 100 million rural Indians. HLL is also pursuing the out-of-home consumption. It is already the largest in hot beverages vending with over 15,000 tea and coffee vending points.

Mr. Banga said, "Our new initiatives by themselves create large vocational opportunities for people. HLL Network aims to create over a million self-employed entrepreneurs. Project Shakti aims to engage 25,000 underprivileged rural women, giving them economic independence. Services by their very nature, are employment intensive and will also provide significant employment. All our channel initiatives are thus completely aligned with the national interest and priority of employment generation."

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