The Internet Marketing of Project Shakti Essay Sample
- Word count: 5145
- Category: poverty
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The Internet Marketing of Project Shakti Essay Sample
HUL is India’s largest fast moving consumer good company and is a 51.55 percent owned subsidiary of the Anglo-Dutch Unilever, a Fortune 500 transnational. HUL employs 36,000 people and claims to touch the lives of two out of three Indians. The old Shakti Web site gives the following objective: “to create income-generating capabilities for underprivileged rural women, by providing a sustainable microenterprise opportunity, and to improve rural living standards through health and hygiene awareness.”3 Project Shakti is presented as “empowering women in rural India,” and the text evokes the pioneering work carried out by the Grameen Bank in Bangladesh, claiming that HUL is working with NGOs and government agency partners which have established SHGs among rural women. The Web site asserts that the project provides individual women an income in access of Rs 1,000 ($22) per month, but also:
In addition to money, there is a marked change in the woman s status within the household, with a much greater say in decision making. This results in better health and hygiene, education of the children, especially the girl child, and an overall betterment in living standards.
These are not modest claims. The overall presentation of the project promises a fundamental transformation in the lives of rural women participants. “Shakti” itself means “strength,” and the subheading to the project name is “Changing Lives in Rural India.” The idea of recruiting individuals of modest means to sell company goods on a “direct-to-home” model is not original to HUL. Schemes such as Avon, Amway, Mary Kay Cosmetics, and Tupperware were well established in the United States and Europe generations ago, and some have moved into developing countries (Cahn 2006; Wilson 2004). What is distinctive about Project Shakti is its joining of this marketing model with the mechanisms of development projects such as SHGs, the reliance on microcredit, and the rhetoric of social justice inspired empowerment.
The recourse to pathos to establish the validity of a project’s goals is not an unusual practice by organizations involved in development. The Shakti Web site provides pathos in abundance. The most poignant testimonial is in the form of a five minute video portraying Rojamma’s story accessible from the project home page. Rojamma, in the sad English speaking voice of the narrator, recounts growing up in poverty and being married off at age seventeen, bearing two daughters only to be abandoned by her husband. Rojamma finds dignity in becoming a member of a newly formed SHG and learning to save one rupee (20) a day to build up the group’s funds. She eventually becomes a successful Shakti dealer and claims that her life has been transformed as a result of Shakti.
The Organization of Project Shakti
The work of selecting and training women dealers from rural areas is carried out by field workers, numbering 650, termed Junior Rural Sales Promoters (JRSP). There is an increase in responsibility as one moves through the ranks of the field team. The JRSP and the more senior Rural Sales Promoter (RSP) are responsible for 20 to 25 Shakti Dealers each. These field workers are not HUL employees; rather they are “outsourced,” employed by a management consultant firm. However, they work under a hierarchy of HUL managers, all under the control of the Business Head of Rural Ventures in Mumbai.
The majority of these field workers are young university graduates, many of whom hold MBA degrees and are eager to make their way in the business world. The overwhelming majority of them (95%) are male. Their jobs require them to travel extensively, visiting at least two Shakti Dealers a day, encouraging door-to-door sales. It was explained that the constant travel made the work unattractive to women.
It is the Sales Manager who makes the contact with local NGOs or with the District Collector in order to arrange for a concept-selling meeting with SHG members. Shakti dealers do not have to be literate; however, they have to be willing to learn the system of record keeping promoted by the project. Two requirements for dealership are the ability to raise Rs 10,000 ($220) and the support of the males of the woman’s family.
The products sold by Shakti dealers are the same products that are sold in retail across India. In order to ensure coverage in the rural areas and prevent unnecessary competition, ideally, one Shakti dealership is established for every three villages. The ultimate goal is to realize a hub and spoke model, with each dealer servicing the surrounding two to three villages. Although it was discouraged by the HUL personnel interviewed, the data show that much of the selling by individual dealers is to local area shops and stores. The regional sales officer explained that door-to-door selling was difficult in the districts of Madhya Pradesh because of the conservative nature of gender expectations.
The RSPs of various ranks are paid a salary, expenses, and a bonus. The bonus depends on the performance of the dealers that they have recruited. The RSP, then, has an incentive to invest time and energy in themarketing skills of the dealer. In this way, the conditions of employment of the RSPs approximate the structure of a multilevel marketing scheme. Part of the remuneration to the RSP is dependent on the sales generated by the dealers he has recruited.
It can be assumed that the formal structures of Project Shakti, as described, play out differently in the various regions of India. There was a suggestion that Madhya Pradesh tends to be a very conservative state, and one state government officiai even called it “backward.” The state does compare poorly with other Indian states on a number of important indices. Based on 2001 national census data, out of 15 of the major states of India, Madhya Pradesh ranks 12th on the Human Development Index. Thirty-seven percent of the population live below the poverty line in comparison with 26 percent for all of India (UNDP 2002). There is currently a lively discussion of the benchmark that would serve as the poverty line. The National Planning Commission estimates that Rs 356 ($7.80) per person per month would constitute the poverty line. Those below it are eligible for a Below Poverty Line (BPL) identity card which allows the purchase of some staples at a reduced price (Haub and Sharma 2010)
The State of Madhya Pradesh is unique in India in two ways. Its State Domestic Product as a proportion of the Indian average has declined dramatically in the last 20 years or so (Government of Madhya Pradesh 2007). Of even greater concern, the state is rated as the only one in the “extremely alarming” range of the India State Hunger Index based on the Global Hunger Index (Menon, Deolalikar, and Bhaskar 2009). The four districts in which the dealers and former dealers were found range from Bhopal, a well-off district dominated by the city ofthat name, to Sehore, a focal district in the larger research project and known for its soya fields and seasonal influx of short-term agricultural laborers. Both Bhopal and Raisen ranked higher than did India as a whole on the HDI, while Sehore and Hoshingabad were significantly lower (Government of Madhya Pradesh 2007).
Shakti Dealers and Former Dealers
In order to facilitate discussion of the experience of Dhakti dealers and former dealers, details of the 1 5 cases are presented in two tables. In both tables, the cases are numbered, and the village names and districts are provided; this is a necessary step to maintain some confidentiality. Table 1 presents characteristics of the individual women listed as Shakti dealers. Not all information is available for all cases. Where the education of the woman or the land holding of her family is not known, the space is left blank. Unfortunately, caste affiliation for each dealer is not available. Table 2 presents features of the way the women’s dealerships are organized. The significance of each of these factors will be taken up in turn.
Under “workers” are listed the individuals that undertake the various tasks of the dealership. It is important to note that in only six of the cases, women put themselves forward as the primary worker. The next column reports whether the woman or her family operated a store of any type prior to becoming a Shakti dealer. In only two cases was this not done. A “store” could mean any range of structures and marketing arrangement.
Eight of the 15 women held the dealership “in name only.” In some cases, the women had been approached by the RSPs about a possible dealership and then took the matter to their male relatives. But in six cases, it was reported that the RSPs contacted male traders directly bypassing women and SHGs entirely.
Source of funding of the initial buy-in cost of the dealership are a good indication of personal wealth. In only five cases did individuals draw on SHG loans. In 10 cases, individuals reported using their own money, that is, family money, in conjunction with some other source. In two cases, a moneylender was used, and these instances represent two extremes of the class continuum. #5 borrowed the whole amount at exorbitant interest rates, while #15, a wealthy trader in grains and owner of a free standing store, used his own money and risked the high interest rates of the money lender in the expectation of a quick return.
Finally, in order to be able to evaluate whether the project resulted in the empowerment of women, in the liberal sense, by putting a little money in their hands, it was necessary to establish some criteria of the viability of the individual enterprise. Seven dealers reported that they would not be placing another order with HUL for their products and were in the process of selling off the remains of their stock. Three dealers were in the process of waiting to raise sufficient capital in order to place another order and were generally content with the progress of sales. Five dealers were classed as “very successful” as not only had they fallen into a regular pattern of ordering stock but also were acting as distributors to other stores in the area.
Does Project Shakti Provide Poor Women with a Little Money?
Even a casual glance at the information contained in the tables suggests that Project Shakti does not empower poor women by providing them with a little money. Women comprise less than half of the self-proclaimed primary workers on the enterprise. The poorest women, those with the BPL identity cards, have all discontinued their dealerships, falling into the “failed” category. Only five of the 15 dealers sought financial support from their SHG. Four of these five cases fell into the “failed” category. The ideal of a poor, abandoned mother like Rojamma, saved from a life of indignity and poverty by her SHG and Project Shakti, is not approximated by any of the cases. Three answers as section headings will be provided to the question with more detailed illustrative material.
No, because there is no support for and no mechanism to enable the enterprise as an SHG project.
Only in three of the cases were a concerted effort made to make the dealership a group project. Dealer #12 is a 41 -yearold mother of two who had been abandoned by her husband 1 1 years ago and carries a BPL identity card. The SHG she belongs to, composed of 10 members, ran two small grocery shops in the village. The group earned about Rs 5,000 ($110) per month from these shops, and the profits were shared equally among the members. In 2001 , the HUL people came to the village and talked to them about participating in the project. The group quickly raised Rs 1 , 1 00 ($24) but was told that they had to make an initial purchase of Rs 15,000 ($330). As a result, the group members took out a loan of Rs 25,000 ($548) from the Central Bank, bought Rs 1 5,000 ($330) worth of goods, and distributed the goods among the members. The dealer took Rs 3,000 ($66) worth of goods, and she joined with another group member to sell door-to-door in her village and in near by villages. The two also sold to shops in the vicinity. However, sales were slow, and individual customers would ask for credit. Complaining about the lack of support from the RSP, the dealer explained:
Some of the customers took products but did not pay for them until after the harvest. The money was “stuck” for some time; it was difficult for the group to put together Rs 10,000 ($220) to make a second purchase of stock. We decided not to take out a second loan and took the remaining goods for personal use.
Now, she is involved in some petty trade around the village and depends on her brother for grain supply over the year.
No, because the project is scaled for individuals with considerable resources.
Dealer #15 is a 37-year-old mother of four. Her case is classified as failed even though she continues her small retail business. She and her husband run a small shop from the front of their house. She depends on her teenage daughter to keep the records for the shop, as she and her husband are illiterate and belong to a caste of landless agricultural workers. In 2003, the HUL people came to her village and spoke to the SHGs. She decided to try the dealership and borrowed money from the SHG and used some of her own money to make up the necessary Rs 15,000 ($330). Although she now runs a successful store and has repaid her SHG loan, she has discontinued the dealership. She explained very clearly how the issue was one of scale. She said:
Rs 15,000 (S330) is a very great deal of money for me to be able to find. It is hard to put together that amount of money for me. The HLL people would not give me credit, and I am always asked for credit by the people in the village. Although the HLL products are in demand in the village, especially the Fair and Lovely cream among the unmarried girls, I cannot purchase them in the way the HLL people want. Now, everyday I go to town and buy a few hundred rupees ($4.40) worth of things, including HLL products.
Her store is located next to the primary school of the village, and she stocks school supplies for the students. At the other extreme is the husband of dealer #14, who has also terminated his dealership. He is an established trader and estimates Rs 40,000 ($875) would be required to maintain the expected HUL trade cycle. This amount, he stated, is well beyond the means of people whose only source of funding is the SHG and even beyond his own resources.
No, because male help and access to a wide network of people is needed in order to carry out the functions of a Shakti Dealer.
Bordering on a very successful dealership, dealer #11 is also a worker in the mother and child health center and the mother of two boys and three girls. She is 32-years-old, and she and her husband run a small store from the front of their house. The HUL people spoke with her SHG in 2004. She and her husband decided to take on the dealership, and they borrowed from relatives and used their own money to raise Rs 8,000 ($175) for the initial purchase. She and her husband sell door-to-door, and they also enjoy the aid of her elder son and of her nephews. Together, they visit festivals and weddings in neighboring villages in order to move their stock. About 20 percent of the initial stock was sold to shops. They have now settled down to a pattern of regular orders of between Rs 8,000 to Rs 10,000 ($175 to $220) every few weeks. They anticipate the point at which they will act as distributors of HUL products to local stores. Owning six acres already, together they plan to purchase more land.
Choice, Change, and Neoliberal Development Practice
In trying to assess the social justice empowerment potential of Project Shakti, it is clear that the possibility of choice and change can only be discussed in less than half of the cases. In the remaining eight, the ownership of the enterprise by male family members excluded women from participation. In this way, the project reinforced those cultural values that restrict women’s choices in economic life. Most of these women are of higher class households, even though it is not evident that they are all of higher caste. In one Brahmin household, a male family member defiantly refused to let researchers speak with the nominal dealer.
Of the remaining seven cases where women professed themselves as the main worker in the enterprise, the successful cases were typified by strong support from male family members and strong integration into business networks, indicating several sources of potential funding aside from the SHG. Dealer #1 is a middle-aged woman whose husband is a tailor. She already had a small SHG funded business selling ready made clothes and has several grown sons who help her with her Shakti dealership. She was so well established in the network of local small-scale business that HUL gave her part of her initial purchase of goods on credit. Case #11, discussed in the previous section, provides an ideal example of a relatively young couple working together energetically on several projects, including Shakti, in order to improve the life of their families. If there has been change in the choices that these women enjoy as a result of their participation in Shakti, it is a result of these strong cooperative relations with males.
What of the remaining cases that are classified as failed? Have these women experienced expansion of choice and change? It is significant that all the cases that listed “self as working on the enterprise without a male relative have failed. It is also significant that at least three of the women who listed themselves as the main worker in the enterprise had had success with small-scale SHG funded microenterprise prior to undertaking a Shakti dealership. As case #15 shows, it is a question of scale. What is the impact of participating in a microenterprise project scaled beyond one’s economic resources and social networking? If, in some sense, in this project success and expansion of choice is linked to strong relations with male family members and entry into an expanded business network, as the previous discussion suggests, then the failure of individual women without these resources can only be seen as disempowering.
The problem lies in the very structure of the project. The structures that govern participation in the project, like the expected turnover rate and the high buy-in cost, are shaped by financial self-sustainability and profit goals. Credit from the HUL distributor, or field team, is not available to the dealers who need it the most. Credit is given to the most successful and resource rich dealers. Here is the disjuncture between corporate interests and developmental interest, or as Newell and Frynas (2007) phrase it: CSR for business and CSR for development. Those developmental aspects of the project that would enhance the capability of the poorest women to become successful dealers are left to the NGO partners whose own goals may be at variance with the financial sustainability required of a Shakti dealer. The understanding of empowerment of one NGO, providing the SHG contact, is clearly in the feminist empowerment mode. The understanding of empowerment of the other NGO from whose SHGs dealers were recruited centers on poverty alleviation through microcredit. The understanding on the part of HUL is much more modest, focusing on increasing sales to provide the dealer with a little bit of money and the corporation with a lot more.
The practice of some RSPs in approaching the more viable male candidates for Shakti dealerships is to be expected. They seek out candidates for dealerships among the successful, small-scale entrepreneurs of the villages. In the accounting of the volume of sales on the part of dealers used to determine the RSP’s monthly bonus, no regard is given to the gender of the dealer involved.
The impediments to the successful empowerment of Shakti dealers are familiar ones in the gender and development literature. The piping of project benefits to the husband, the falling away of very poor participants for simple lack of resources, and the inability of SHGs to provide support in the microenterprise have been reported before. But although the project may not serve to empower poor women, it nonetheless is successful in providing an innovative distribution system for the corporation to literally grow its market in rural India. Recourse to development discourse on the project Web site, and the presentation of the project itself as a women’s empowerment project, can be explained as a function of the blurred nature of neoliberal development practice and discourse.
In a few days, Padmavati, the enterprising wife of a jobless carpenter in rural India, will begin an exceptional experiment involving a Palm Pilot, Hewlett-Packard and Hindustan Lever. She will test-run an online community portal jointly designed by the Indian consumer goods group and its parent, Unilever, and the US technology group.
Padmavati will be taught to use a personal digital organiser to access information about hospitals, schools and food prices near her home village of Chirumarri, two hours’ drive from Hyderabad in eastern India. Later, the pilot project will be upgraded to allow her to buy soaps, shampoos and other Hindustan Lever products.
Padmavati’s selection for the project was a reward for her success as a “Shakti distributor”. She is one of hundreds who belong to gender-based self-help groups in Andhra Pradesh, home to the largest concentration of women’s groups in India. Hindustan Lever has co-opted these groups to sell its products in the outer fringes of rural India, places that are beyond the reach of formal distribution networks.
After three years, Project Shakti’s success encouraged its sponsor to refine the business model by launching i-Shakti, a low- cost communications tool that will ease paperwork and open the door to instant information.
“I’ll be able to buy my supplies on a computer,” says Padmavati, scarcely aware of her role in this small revolution.
The partnership between Padmavati’s self-help group and business is unprecedented. The implications are huge for Padmavati, Hindustan Lever and businesses in general, notably foreign companies defeated by distribution problems in India.
Already, vehicle-maker TVS is using the “Shakti” model to sell its motorcycles to better-off villagers. Prestige of the UK has found a way of getting its pressure cookers into rural homes, a natural market for its time-saving and fuel-efficient product. Japan’s Nippo is negotiating to sell dry-cell batteries there.
And Dutch group Philips is considering similar means to reach lucrative remote areas, where erratic voltage ensures that rural India accounts for 60 per cent of the lightbulb market.
“Multinationals have realised what Indian companies have known and are only now acting on – that the rural market is not only huge but is driving the economy,” says Pradeep Kashyap, managing director of Mart, an adviser on rural distribution strategies.
Only a quarter of India’s economic wealth is agricultural, yet three-quarters of the labour force works on the land. A bad monsoon, such as those of the past two years, can be devastating for rural output and incomes. Higher, sustained non-farm incomes in rural areas are crucial if companies are to exploit the biggest source of consumer demand in India.
That Project Shakti is the work of Hindustan Lever is a sign of how seriously business views the fringes of rural India. Core rural markets generate about 50 per cent of Hindustan Lever’s turnover. But the emergence of price-cutting regional rivals has stunted the company’s growth in its back yard and forced it to an important conclusion: it has to broaden its markets.
There are 638,000 villages in India and Hindustan Lever, whose distribution in the country is unmatched, has been able to reach about 100,000, all with a minimum population of 2,000. Anything smaller was too remote and unsuitable for direct marketing.
“We reached a level of penetration that could not be improved alone and viably. That’s why we have chosen a partner in the self- help groups,” says Dalip Sehgal, who heads the new ventures unit at Hindustan Lever. “It’s enlightened self-interest. We access new markets, train people and, crucially, generate rural incomes.”
Under Project Shakti, Hindustan Lever trains women in micro- business skills. They then sell its products and earn an income from what the company describes as “low-risk, sustainable opportunities”.
Women were initially hesitant about joining Project Shakti, preferring tested partners such as governments or pressure groups, says Rama Kandarpa, who advises on micro-finance in Hyderabad, the capital of Andhra Pradesh. Their husbands were also hostile. Initially, the drop-out rate soared to 50 per cent; today it is 5 per cent.
Those who remained were alarmed by concepts such as margins on goods that they were selling to neighbours. “The deep community spirit among the women meant they were not competitive in pricing goods sold to neighbours. We told them it was not wrong to charge a margin – after all, our aim was to turn illiterate women into viable entrepreneurs,” says Mr Sehgal.
The typical monthly income is Rs1,000 (Pounds 13) (exceeding the official minimum wage of Rs750) from the sale of Rs15,000 worth of products in five or six villages with a total population of about 6,000. A transaction can be as small as Rs1 for a sachet of shampoo, implying a large number of very small sales.
The Shakti distributor’s contribution usually doubles her household’s earnings. The only start-up cost is raising a Rs10,000- Rs15,000 loan from the women’s self-help groups to buy supplies from Hindustan Lever.
An independent income empowers the women, a vital aim for people regarded as reliable employees, responsible managers of home budgets and excellent repayers of loans.
For Rojamma, a single parent from the village of Kurumurthy, the benefits could not be clearer: “I can now send my daughters to school. I am someone today.”
HUL presents its Project Shakti both as an empowerment project for poor women and as a tool in the development of the rural market. Our sample of cases of dealers and former dealers suggests structural impediments to the empowerment, even in the liberal sense, of poor, rural women in the very organization of the project. A clear disjuncture between the goals of the corporate fieldworkers and NGO fieldworkers was identified. The RSPs seek to maximize their bonuses in selecting and investing effort in the more viable potential dealers such as male entrepreneurs and couples from trading families, while the NGO’s personnel focus their SHGs on their own organization’s goals. The corporation’s other stated goal of growing the market appears well served by the project. Even with the global economic downturn, which is now being felt in sales, HUL reported a 9% percent growth in home and personal care products in the September quarter of 2010. Sales of personal products, such as shampoo, face creams, and toothpaste, grew by 15% in this period.
The question, of course, is how willing the corporation would be to change the actual organization of the project in the field. How willing would it be to add development elements to business as usual? The strict limiting of recruitment of dealers from among poor, rural women would deeply reduce the remuneration to the RSPs and result in lower overall sales. The creation of a stronger support structure for women who are totally dependent on the SHGs would require an investment of resources which would cut into profits. Developmental elements could be worked into the corporate contribution to the project, most obviously the provision of credit to the most needy. Instead, it appears to be assumed that these developmental elements will be supplied by the partnering NGOs while HUL concentrates on business as usual.
To a large extent, Project Shakti has been used as a vehicle to make a number of points about current development discourse underlain by the co-optation of social justice rhetoric by neoliberal development practice. The appreciation of these points aids in making the use of this discourse on the part of the corporation in relation to Project Shakti comprehensible. The Project’s occurrence at a particular historical moment in post-liberalization India is due to several national and local factors, among them: the scale of HUL’s investment in the Indian market with the need to expand that market to include “the poor,” the rise of ruralconsumerism, and the spread of a variety of microcredit models involving the formation of SHGs throughoutIndia’s vast rural population.
These specific local factors are backgrounded by larger transnational processes having to do with the blending of market principles into traditional development discourse. In the process, the feminist struggle for the collective redress of moral injury became depoliticized and routinized in the restricted definition of empowerment, aimed at giving women access to “a little money” through the availability of microcredit and microfinance. Project Shakti builds on this development in incorporating extant microcredit SHGs into its model of the partnership purporting to empower poor women.
A fault line in the structure of the project has been identified between the interests and practices of the RSPs and the partner NGOs. The practice of the RSPs was tested against a representation of the project available on the Internet and espoused by the corporation itself. The disjuncture between the Web site presentation of Project Shakti and its on-the-ground functioning is resolved by the corporation in its ability to speak of the project both as an opportunity to empower poor, rural women, drawing on the fuzzy language of mainstream development discourse, and as an opportunity to develop brand recognition in villages, drawing on the language of market penetration and growth. The disjuncture between the goals of the RSPs and the goals of the personnel of the NGO is a matter of indifference as the positions are held by individuals who would seldom have or need the opportunity to test their versions of the project against that of the other. Returning to the question of the consistency of corporate interests with those of the poor, so prominent in the current CSR debate, this fault line in the project itself may be seen to exemplify the disjuncture between the interests of the corporation and those of the poor.