Table of ContentsIntroductionA Promising LandscapeA Case SnapshotIntroduction“The only way to beat the competition is to stop trying to beat the competition. » - (W. Chan Kim, 2005) Hindustan Lever Ltd. (HLL) is widely considered one of the pioneers among companies catering to the bottom of the pyramid in India. But its widespread rural presence was not always the case. Say no to plagiarism. Get Custom Essay on “Why Violent Video Games Should Not Be Banned”?Get Original EssayHLL was initially present in the Indian market for over 5 decades as a premium brand catering to the needs of class d Indian elite, which formed a very small segment of the market. It was in the 1990s that an indigenous company Nirma ltd. did something completely unknown at the time. Nirma brought out low-cost detergents for the lower strata of the country who mostly lived in rural areas. This is a segment that has never been considered as a potential customer by multinationals like HLL. But there was something Nirma saw in this market that HLL didn't. Rather than focusing on a few urban rich, they saw an opportunity to meet the needs of the untapped market of the aspiring poor living in suburban and rural areas across the country. Nirma created a completely new business system that included new product formulations. , an extensive distribution network, special packaging for everyday purchases and favorable prices. HLL, who initially ignored the move, followed the trend as they could not ignore the success Nirma achieved. In 1995, HLL made a radical change to its business model and launched its own Wheel product, in the same market segment. HLL has decentralized its production, marketing and distribution and created sales channels through small outlets where they can reach the rural market. It has also changed its cost structure to create low-cost products for the rural market. But low cost does not mean cheap quality products. HLL had carried out extensive research to create a product tailored to the needs of the rural diaspora. Wheel's innovative formulation took into account the fact that rural populations often wash their clothes in rivers and public water systems. So it had a robust formulation that can withstand hard water. In a very short span of time, both companies recorded high volumes and profits, with Nirma becoming the world's largest detergent brand and HLL imitating its new business model in other developing countries to become a global giant. This was perhaps one of the first cases in the Indian market where we saw Indian companies looking beyond the boundaries and constraints of the existing market and, instead of trying to outdo the competition for market share walked in the already saturated red oceans, they tried to create blue oceans. by creating demand in an uncontested market space and reaping the benefits. What's interesting is that by creating a blue ocean, they opened Pandora's box. Rural markets are now becoming a source of growth opportunities and many companies are analyzing markets to discover unmet customer needs and using new and innovative ways to satisfy these needs. A promising landscape Urban demand for consumer products has remained stagnant. for some time now as rural markets prepare to take over. The rise in wages and the increase inEmployment opportunities in rural India are leading to booming markets in suburban and rural areas. Spending by India's more than 800 million rural consumers reached $69 million between 2009 and 2012, 25% more than their urban counterparts (Kapur et al., 2014). Monthly per capita spending in rural markets during this period was 19.2%, exceeding that in urban markets by 2 percentage points. According to Credit Suisse, almost 75% of the factories established in India from 2004 to 2014 were built in rural areas and represented almost 55% of the country's manufacturing GDP and 70% of all new manufacturing jobs in 2014, giving a CAGR of 6.2% for GDP per capita in the countryside, which exceeded the urban CAGR of 4.7% during the same period. (Kapur, et al., 2014) The above figures suggest that there has been a steady increase in the income of rural consumers, especially due to the concentration of manufacturing industry in rural areas, which has gave rural populations another source of income outside of agriculture. The country is embarking on the path to inclusive growth and prosperity, the real beneficiaries of which will be those who are present in the right place and at the right time. And more than ever, the right place for business right now is rural markets. Rural India, or rather real India, is in the spotlight as it has started to prosper and is prophesied with a bright future ahead of it. Businesses are therefore incentivized to understand rural markets in order to provide products and services in which rural consumers perceive value. This is not an easy task given that the psyche of rural consumers is poles apart from that of their urban counterparts. Each rural market again poses a different challenge from the other given the deep-rooted cultural diversity in the country. In such situations, the way of approaching each market must be different. Despite these challenges, these markets provide an opportunity for companies to create a sustainable operating framework/model through which they not only contribute to their own profits, but also create value for customers that goes beyond the product itself. 'they buy. This brings us to what will be a recurring theme, namely the idea of ​​“inclusive capitalism”. This involves creating a sustainable ecosystem for these markets whose beneficiaries are both the company and the customers. This can be done by empowering customers' lives through innovative technologies or business models that encompass the product or services they benefit from. There was a time when rural markets and rural consumers were considered satisfied by the mere satisfaction of their physiological needs and it was believed that the pattern of things would remain the same regardless of government policies. The sector was becoming saturated and growing at a snail's pace, sloppy by cutthroat competition, businesses found themselves facing a black hole as they no longer had options for growth. But companies are gradually realizing the enormous potential of creating their own blue oceans in rural markets. But this will not be easy because they can no longer rely on their existing strategies and business models. They need to stop comparing themselves to their competitors and instead focus on creating value through innovative business strategies for their customers in rural areas. An Overview of the Case Now that industries are slowly realizing the market potential, it is time to act on it. This brings us to our study of one such company.