This case series deals with the pioneering experience of Unilever at the "base of the pyramid" (BOP). The BOP consists of those 4 billion people excluded from the market economy and living in poverty. The BOP is a new management concept that conveys the promise to fulfill a twofold objective: promote social development and allow companies to regain double digit growth rates. For almost 100 years, Hindustan Lever (HLL), a subsidiary of Unilever, had been operating in the Indian sub-continent with a virtual monopoly of the Fast-Moving Consumer Goods market. In the early 70's a small start-up, Nirma, began producing detergents to sell to the rural poor. In a few years, HLL came to find out that although they hadn't lost customers, Nirma now represented over 35% of the market share in detergents. What Nirma tapped into was the mass markets of the rural and urban low-income areas, and grew exponentially because there were no other offerings to that market segment. In fact, HLL went as far as to claim at one point that these weren't markets at all. This case series is an exploration of the fast-moving consumer goods market in India and how a small local company caused a large competitor to not only respond, but re-look at the way they approached all markets. This is not a story of David defeating Goliath, for really the lessons learned come from the larger HLL, which despite its size, was able to recognize the new and huge opportunities that rested largely untapped in mass markets, and savvy enough to find a new way to do business in all of its Indian markets. This case is very good at breaking down the individual pieces of the mass market puzzle, while at the same time is sequenced to allow for discussion and investigation to touch on many key topics. For some students, this case will be an eye opener to the realities of the low income consumer, for as many multinational corporations can attest, most of the market is not even recognized. With accompanying video.
Case B describes how HLL created a brand new business model to compete in the BOP market and the outstanding results it obtained. It concludes by posing the following questions: Are these growth rates sustainable? And if they are, can they be replicated with Unilever's Multi-local, Multi-national approach?
Case C ends the case series with information on how Unilever approached BOP markets in Indonesia and Brazil and broadens the question further to ask: How can Unilever benefit from the lessons learned at HLL? Has Hindustan Lever found a new strategy to gain larger markets globally in its quest to meet the everyday needs of everyday people everywhere? Or had it merely found a way to push out a young competitive upstart in India without there being any scope to replicate the strategy?
This item is available for purchase from IESE Business School. Reference #: DG-1424-E, DG-1425-E, DG-1426-E