Case 11

1. In your own words, what distribution strategies is Hindustan Lever implementing in India? Describe the advantages of these new channels for Lakme.
The strategies implemented are the door-to-doorselling and a chain of beauty salons. The advantages of the door-to-door selling are that it is more flexible, has lower fixed costs (since it doesn’t need buildings or large investments), thecompany can save money because they don’t do much advertisement, and sellers are not paid too much. In the case of salons, the firm has 50 and plans to open 200 more in India. The positive aspects are thatdeveloping markets like India, with a fragmented retail sector, offer consumer-goods companies the possibility to experiment with new business models. Most of the company goods are sold throughmillions of small, independent shops that can’t complain if Lever starts selling competing products door-to-door.
2. Analyze the ways in which these new channels add value to the products/services (thinkof the differential issues from the consumer view point).
The door to door sales have helped to create value in the product. By selling the product this way, the customer now has a convenient way tobuy it. An expert demonstrates the product and explains how it works, providing information on its benefits and features. Now, the consumer does not even have to leave home to buy the product, whichadds comfort and saves time.
Selling the products in the salons also adds value to the products. The consumers are able to discover what products they like that the salons use and later, purchasethem. The consumers have received information on desired products and tested them in the salon. In addition, consumers can also have additional services (haircuts, waxing, facials) in the salon.Consumers are willing to pay for the added convenience of these services.
3. According to the theory studied in class, explain the “growth strategies” that Lakme is following in India.
The growth...