Fast moving consumer goods (FMCG) major Hindustan Lever Ltd (HLL) is planning to expand its rural market base with the launch of the second phase of its Project Bharat marketing initiative under which rural areas with less than 2000 population will be targeted.
Project Bharat phase one was started last year with focus on shoring up distribution, generating product trials and conducting brand awareness in rural centres with a population of over 5000.
Some of the key HLL brands such as Fair & Lovely, Clinic, Pepsodent etc were promoted in the hinterland under phase one.
In phase 2 of Project Bharat, AIM will be a major HLL brand launch along with some other products. HLL is also trying to study the success and replicate the pattern of its highly successful brand Lifebuoy in villages.
Under the second phase of Project Bharat, HLL will plans a massive rural advertising campaign which will use public transport, walls, village schools, primary health centres and other rural bodies to spread its brands. HLL expects that many villagers will migrate to use of toothpaste from toothpowder.
The rural market size for toothpaste is estimated at Rs 500 crore per annum. This is expected to grow at thrice the rate of average six per cent urban market growth.
The latest brand of toothpaste from the HLL stable, Aim, will be a core product for its rural marketing strategy for which the company has earmarked nearly 40 per cent of its entire oral care ad budget, according to Mukul Deoras, general manager (marketing), HLL.
Currently, nearly 70 per cent of HLL's revenues come from sale of products in the urban market which is now close to saturation. "The rural market in the country is growing at thrice the rate of the urban market and Aim is expected to garner an additional 10 per cent market share within the next three years," Deoras said.
The toothpaste market in the country is estimated at Rs 1,500 crore per annum (75,000 tons of paste per annum), of which, HLL claims a share of 35.4 per cent through its two major brands Close Up (19.5 per cent) and Pepsodent (15.9 per cent).
Through AIM we expect more consumers to become toothpaste users, as currently only 52 per cent use tooth paste while 29 per cent use tooth powder. Further, in the rural market, the penetration of toothpastes is a mere 43 per cent while toothpowder usage is to the extent of 31 per cent only.
The per capita consumption of toothpaste in the country is as low as 100 grams compared with 200 gm to 250 gm in other south-east Asia and Latin American regions.
The renewed focus of HLL on the rural market began with its new growth vision Project Millennium. Under this, HLL has set an ambitious target to double its turnover every four years.
As per a HLL survey, India is set to witness three consumer mega trends, self-denial to affordable indulgence resulting from changing values and higher income; desire for quality time which will result in need for convenience; increased awareness about personal health & vitality, including rural India.
Besides the three mega trends, socio economic drivers will influence an "inflexion point in rural consumption" in the next decade. Hence the move to target rural India in a big way by popularising key brands.
