A report submitted to Delhi Business School, New Delhi as a part of fulfillment of

MBA + Post Graduate Program (ndustr! ntegrated" in

#ntrepreneurship $ Business%
&'P() Mar*eting +esearch on Nirma And t,s Suppl! (hain Management%
Submitted to - Submitted B!-
Ms. Preeti Singh Pranesh Shukla
.acult!, Mar*eting (dbs/0120/3242"
Delhi Business School,
New Delhi




dbs
Delhi Business School
Delhi Business School
B)22/51 M%(%%#%, Mathura +oad, New Delhi
3ebsite-www%dbs%edu%in
A(6N'37#DG#M#N&
I would acknowledge our indebtness to Mr% sabra8 Araw*ar (Sales
manager, institutional" Nirma, New Delhi and Pro% Ms% Preeti Singh,
who was a source of continuous guidance & inspiration to us & for taking in
organizing, designing & completing this project.
I would also thanks to all the other persons who help me directly and
indirectly to make this Project .



P!"#S$ S$%&'!
CONTENTS
PREFACE
About the Company:-
Anne9ure
Vision, Mision & Philosophy
Nirma products
Pricing
Supply Chain Management:-
mbrella Mar!eting
"istribution
#e$el o% "istribution

P#(!S# )
+:+A7 NDA
*$##+S an interesting way of putting rural India into perspecti,e. If India+s
population, as per the -../ estimates of the %nited "ations Population 0i,ision, is
./1,112,333, then rural India, taken as 42.25 of India, is 4-.,.6.,78.. 0i,ide that by the
estimated total world population of 8.. billion, and rural India becomes -1.15 of world
population. (orget all of us sitting in the cities 97.75 more: ;; -1.15 of the world li,es in
rural India. <hich, gi,en our effecti,e lack of knowledge makes it a bit like one of the
world+s last great undisco,ered countries.
ural inhabitants aren+t a different species, but consumers as =uirky and
demanding of marketers as any of their urban cousins. !nd just as eager to consume ;;
maybe e,en more so, gi,en their access to messages of consumption ,ia *>, but lacking
the easy access that makes urban consumers blas?. (or marketers the potential is huge ;;
a country waiting eagerly for their products, pro,iding they can make the effort to e@port
inwards, and learn to play the games by rural rules. !nd if they don+t, the chances are
that they will be left behind. #,en with the minimal effort put in by companies so far,
rural India now accounts for majority, or near majority, consumption in many categories.
;; ural India is clearly not such an area of darkness anymore, and as a further incenti,e
to keep the lights on, remember that farmers get electricity freeA
Bne of the most popular and widely accepted Carketing Cyth is that the rural
consumers will only buy really cheap mass market brands. Dut the stark reality is that
though brands like "irma lead, but penetration of premium products has also been
obser,ed e,en to the lowest S#E. *he percentages may be ,ery small, but gi,en the
large uni,erse, the actual figures may be significant
*hus when we are aware of the fact that brands like "irma rule the rural market, it
would be interesting to study and analyse their basic marketing inputs ;;;;;the 7PFs

N+MA
About the Company
Nirma is the Rs.17 billion Detergents, Soaps and Personal Care Products Brand, a
market leader in the Indian detergent market and
second largest in bathing soaps... the brand NIR! being one o" the #orld$s biggest in
it$s segment... a result o" it$s mission to pro%ide $Better Products, Better &alue, Better
'i%ing$.
*he man who altered the clothes;washing habits of the &arsanbhai Patel
the chairman of the !hmedabad;based "irma 'td. *his chemist who manufactured
detergents at home in !hmedabad in -.6. has certainly come a long way. $e worked
from his backyard which de,eloped into a soap factory, cycled to retail outlets and
hawked his brand at one;fourth of the price of similar products then a,ailable. !t s 6,
"irma, named after his daughter, was the cheapest detergent ,ying for attention on shop
shel,es. Dy the late -./3s, "irma had become one of the world+s largest;selling detergent
powders. *hat he rewrote history and ga,e $industan 'e,er, the Indian subsidiary of the
!nglo;0utch foods and toiletries conglomerate %nile,er, a huge headache is well;
chronicled. *oday he is proud owner of an s 1,833;crore !hmedabad;based soaps and
detergents major
It has been Patel+s dream to make "irma a synonym for =uality. G"irma is not
merely a brand or a product, it is a dynamic phenomenon, a re,olution, a philosophy,G he
once said. "irma sells o,er /33,333 tones of detergent products e,ery year and
commands a 285 share of the Indian detergent market, making it one of the worlds
biggest detergent brands. *owards this end, he tried his hand at many brand e@tensions.
(rom toothpaste to salt and matchsticks, they all nestled under the "irma umbrella.
Incorporated as a pri,ate limited company, "irma was con,erted into a deemed public
company and then to a public limited one in "o,.+.2. "irma is an o,er s. -4 billion
brand with a leadership presence in 0etergents, Soaps and Personal Eare Products,
offering employment to o,er -8,333 people. In fiscal -..4, the "irma group restructured
operations and merged four companies H "ilinta Ehemicals, "irma 0etergents, "irma
Soaps and 0etergents, and Shi,a Soaps and 0etergents H with its flagship "irma 'td.
Products are marketed through a -33;per cent subsidiary, "irma Eonsumer Eare.
"irma has undertaken backward integration into manufacture of Industrial
Products like Soda !sh, 'inear !lkyl Denzene 9'!D:, !lfa Blefin Sulphonates 9!BS:,
(atty !cid, Ilycerine and Sulphuric !cid.
*oday, "irma sells o,er /33333 tones of detergent products annually, gi,ing it a
285 share of the Indian market, which are the worlds second largest fabric wash
products markets. *his makes "irma India+s largest detergent marketer and one of the
world+s biggest detergent brands. *he Eompany has ac=uired &isan Industries 'imited
situated at >illage Coraiya, 0ist. !hmedabad as a going concern, which was engaged in
the business of manufacture of detergents, Single Super Phosphate, fertilizer and printing
and packaging. *he second stream of the 713333 tpa Soda !sh plant at ,illage &alatala,,
Dha,nagar was commissioned in September 1333. *he Eompany also set up a pure water
plant to manufacture 1./3 lacs *P! >acuum;salt in Bctober 1333.0ebottlenecking
process which was made during 133-;31 by the company resulted in e@pansion of
installed capacity of Soda !sh at >illage &alatala,, from 713333 *P! to 683333 *P!.
*he total cost of the project is appro@imately s.--3 crores. *his project is e@pected to be
completed in September, 1331. *he company issued Secured "E0 aggregating s.263
crores in order to augment its working capital and also to bring;in cost effiency in
funding cost
n detergents mar*et "irma and $industan 'e,er are close competitors with
2/5 market share each. "irma leads the popular segment, while $'' leads the premium
detergent powder segment. P&I and $enkel Spic are the other key competitors in the
detergent market.
In toilet soaps, $'' has a dominating 625 market share. "irma has also garnered a
significant 115 market share in a short time. Bther major players in the segment are
Iodrej Soaps and P&I.
ANN#;:+#
Board of Directors
(hairman $ Managing Director) &arsanbhai & Patel
#9ecuti8e Director) &alpesh ! Patel
Director) Shrenikbhai & 'albhai
Director) Canubhai Shroff
Director) ajendra 0 Shah
Director) !tulya Prasad Sarwan
Director) akesh & Patel
Director) $iren & Patel
Additional Director) &aushikbhai " Patel
Additional Director) Ehinubhai Shah
Performance of leading companies
(ompan! name Sales <
!o!
'perating
profit
<
!o!
PA& <
!o!
"irma 'td 7/16.4 73 -1/4.. 78 6.3.. 8
Smithkline Deecham Eonsumer
$ealthcare 'td
1246.- 1- 8-1.2 13 217.6 -6
Pidilite Industries 'td --78.. 13 187.1 -2 -28.7 .
Iodrej Soaps 'td 138-./ -/ 278.2 21 -/7.4 631
Indian Sha,ing Products 'td 423.8 -6 -71.1 12 86.1 -6
Dritannia Industries 'td 28-. -8 2-4.3 18 -78 -1
0abur India 'td 1./... -7 2.4.- 28 111.1 17
"estle 'td 76.7 -2 /48.3 17 7.4 24
Eadbury India 'td -/66./ -1 283.2 1/ -4-.8 16
eckitt !nd Eolman Bf India 'td -7/7.4 -- ./.1 92: 8... -6
$enkel Spic India 'td 4-4.77 -3 1/.6 9-8: 4.18 9-.1:
Eolgate Palmoli,e India 'td 1.7/ . 2--.3 / -46 21
I * E 'td -331/.. 6 7661.4 -. 18-6.8 11
Procter and Iamble $ygiene &
$ealthcare 'td
-133.. - 1.8.1 13 -/8.7 17
$industan 'e,er 'td 176-. 3 7748./ . 22--.6 -6
*ata *ea 'td 1147.. 91: 688./ 9-3: 263.6 911:
Carico Industries 'td -623./2 98: -4-.6 7 -1..// .
(o) * )ear on )eargro#th
Source+ India In"o line database
Vision, Mision & Philosophy
Nirma is a customer-focused company committed to consistently
offer better quality products and services that maximise value to
the customer.
This customer-centric philosophy has been ell emphasised at
Nirma throu!h"
#ontinuously explorin! & developin! ne products &
processes.
$ayin! emphasis on cost effectiveness.
Maintainin! effective %uality Mana!ement &ystem.
#omplyin! ith safety, environment and social obli!ations.
'mpartin! trainin! to all involved on a continuous basis.
Teamor( and active participation all around.
)emonstratin! belon!in!ness and exemplary behaviour
toards or!anisation, its !oals and ob*ectives.
Nirma is a phenomenon and synonymous ith Value for Money. The
brand transcends the specific dynamic of any particular product
cate!ory, hich is best captured in its above mission statement - a
statement of sustained innovation, an unceasin! effort to deliver
better value to consumers, throu!h better product quality.

P+'D:(&
"irma is aptly considered as a marketing miracle and this is reflected in the strength
of the brand. "irma has successfully challenged and changed the con,entions of
detergents marketing and today leading business schools are analyzing it+s strategies to
demystify this miracle. "irma+s core marketing thrust re,ol,es around prompting
consumer trials by offering a good =uality product at most competiti,e price and
retaining these new consumers by continuously offering the same +>alue (or Coney+
e=uation. *his is borne by the fact that today "irma can boast of a strong brand loyalty
from its 733 million consumer base. Dased on the pragmatic concept of =:mbrella
Branding=, "irma has been increasingly successful in e@tending its brand e=uity to
other product categories like Premium 0etergents, Premium *oilet Soaps, Shampoos,
*ooth pastes and Iodized Salt, thus opening new ,istas to the field of Drand Duilding.
"etergents
"irma dominates the popular detergent segment with brands like Nirma Popular powder,
Nirma Detergent powder, Nirma bar, etc. Super Nirma detergent powder is positioned in
the mid;priced segment. 0etergent ,olumes in (J33 increased by 7.75 to 6-8,47. tons.
Nirma "etergent Po&der was launched in -.6., by Cr. &arsanbhai Patel. *he
product created a loyal customer base that increased day by day. In -./1 "irma
0etergent Powder became the largest selling detergent powder in western India and by
-./. the same was established on the national scene. *he detergent when launched was
priced one third that of the nearest competitor. *he detergent powder was o,ernight
con,erted into a common mans necessity from being a lu@ury of a few. *he credit goes to
the pioneer of this new en,ironmental friendly technology, Cr. &arsanbhai Patel who
lowered the usage barrier and started the "irma phenomenon which took the world by
storm. !fter a period of more than 13 years the poly packet for "irma 0etergent Powder
was changed in -../ to differentiate it from me too look alike+.
*he strategy seems to ha,e worked as consumers ha,e successfully identified the new
pack as a genuine "irma product. *he product today is a,ailable in two pack sizes 833
grams and -333 grams.
Super Nirma high =uality spray dried detergent was launched into market in -..6
with a price 735 lower than the nearest competitor offering the same =uality. <ith in
a short span of two years "irma Super 0etergent Powder cornered substantial market
share in the premium detergent segment. *he brand targeted towards "irma consumers
who were shifting towards more sophisticated form of washing, clicked ,ery well as the
e,er dependable "irma Drand name assured high =uality at affordable prices. *he
powder is a,ailable in 18 grams, 833 grams and -333 grams in polypacks.
"irma launched a flanking brand named Nirma Popular Po&der in selected pockets
where 0etergent powder usage was limited or the me too brands were eating into "irma+s
share. *he product was a good product a,ailable at prices that would switch people to use
branded powder. *he substandard products took a se,ere beating in the pockets where
"irma Popular was launched. It is a,ailable in 833 grams and -333 grams pack sizes. *he
product with similar name and slightly different formulation is being sold in the e@ports
market successfully.
Nima 'reen Po&der introduced in K7 ; +.. is "irma+s introductions in a segment
which was not addressed by "irma till then. *his powder positioned in the economy
segment has lingering fresh lime perfume. It scores high on cleaning efficiency and
generates a good amount of lather lea,ing clothes sparkling clean. *his powder is packed
in multi;colour poly bag. *his product is a,ailable in 833;grams and -;kg packing and is
sold e@clusi,ely through the efficient "ima distribution network.

0ri,ing the inspiration from its success in 0etergent powder market, "irma
e@panded its product portfolio by introducing Nirma "etergent Ca!e in -./4. *he cake
was launched keeping in mind the washing habits of rural India where limited use of
bucket and more so of running water added to the wastage of washing powder. *he
answer was brought by "irma in form of 0etergent Eake. *he brand today is ranked as
most distributed detergent cake brand in the country by !ICS retail audit. *he product is
a,ailable in two pack sizes of -18 grams and 183 grams
*he positioning of Nirma Popular "etergent Ca!e is similar to that of "irma
Popular 0etergent Powder but meant to fight other detergents cake. *his product is more
important as the unorganized players are far more penetrated in cake market as compared
to that in the powder market. *he product is a,ailable in -18 grams and -83 grams pack
sizes. .
*o meet the consumer+s growing aspirations and to allow consumers to upgrade to a
better =uality product, "irma introduced Super Nirma "etergent Ca!e in -..1. !s
"irma 0etergent Eake is to "irma 0etergent Powder, Super "irma 0etergent Eake is to
Super "irma 0etergent Powder. It was launched to woo back the "irma 0etergent Eake
user who had shifted to the competitor+s product. *he cake has high detergency ,alue at
an affordable price. It is a,ailable in -18 grams and 183 grams sizes.
'aunched in K7 ; +./, Nima 'reen Ca!e became a close no.1 in its segment within
2 months of its launch and was successful in arresting the growth of competition in this
segment. *his brand has seen a number of consumer promotion schemes tied with it. *he
splendid laminated multi;colour wrapper, which shows a slice of lemon and trishul,
e@emplifies razor;sharp dirt cutting efficiency of this cake. *his cake is rich in lime
perfume and has an e@ceptionally high brand recall. It is a,ailable in sizes of -18 grams
and 183 grams
Nima (lue "etergent Ca!e was introduced as a low cost alternati,e to the then
a,ailable blue detergent cakes in K7 ; +.. in ,ery few select states and has e,er since
been performing ,ery satisfactorily. It is the epitome of "irma+s endea,or to pro,ide
better products at more competiti,e prices. It is a,ailable in -18 gram and 183 gram pack
sizes. *his cake is packed in a dark blue wrapper and has strong eye catching presence on
the shelf.
Nima (artan (ar was launched in K- ; 1333, gi,es an outstanding performance
is "irma+s foray into the scourer+s market. *he slogan >Darpan ?ai @a Bartan> in the
product+s *> commercial has helped immensely in con,eying the message of GDartan
Dar+s cleaning efficiency ,ery =uickly across all segments. Bur *> commercial supports
our positioning of "ima Dartan Dar as the one gi,ing superior =uality cleanliness and
making the utensils shiny and sparkling clean. "ima Dartan Dar is a,ailable in a 733
gram packing.
Nirma Clean was launched in K1 ; 1333 and is a,ailable in a 233 gram bar
packing. *he GEhak Ehaka EhakG tele,ision commercial of +"irma Elean+, showing a
whole set of spotless, clean ,essels in a kitchen sparkling with starlight, delineates the
high cleaning =uality of this scouring cake. It is targeted at the low end of the market.
+Elean+ is e@pected to trigger con,ersion from the unbranded detergent powders and
cakes. "irma e@pects the scourers market to undergo dynamism with its introduction of
two scourer cakes.
(athing Soaps
Nirma (ath Soap )Carbolic*) *oilet soap market was dominated by few C"E+s
who could monopolistically dri,e the prices. *he growth of toilet soap market was
tremendous in .3+s and was e@pected to increase further. "irma+s brand e=uity in
detergent market was ,ery strong and was unanimously associated with ,alue for money
products. <e saw no reason why cannot this be e@tended to the personal care market.
"irma ,entured into this market with "irma Dath a carbolic soap to counter the largest
selling soap from a C"E stable. *he carbolic soap segment though a declining market
saw a sudden burst of acti,ity. "irma Dath started gaining substantial ,olumes at the cost
of he competitor+s and India+s largest selling brand. *he pricing of the product was
penetrati,e at a =uality 9*(C ; 635: which the competitor+s could not match. *he
product is a,ailable in 48 grams and -83 grams pack sizes.
Nirma (eauty Soap: !fter targeting the largest selling toilet soap with "irma
Dath, now was the time to target the second largest selling toilet soap. "irma after
successful launch of "irma Dath launched, "irma Deauty. "irma Deauty was a popular
category soap which targeted the middle and lower middle class population of the
country. *he product had high *(C content of 435, an e@cellent aroma and an
ad,ertisement with a touch of aspiration. *he product became an instant success, and in
no time became India+s third largest selling toilet soap brand. *he ,olumes came from the
category shift as well as brand switching. *he product is a,ailable in -33 grams and -83
grams pack sizes and three different perfume ,ariants. ecently company has changed its
packaging and made it more contemporary by printing the wrappers on si@ color Eerruti
machine from Italy thereby differentiating it from the me too look alike+. *he brand today
is growing ,ery fast and is firmly mo,ing towards the second position. Eompetitors tried
to copy the concept and the commercial but were not able to match the success of
the brand. !s it is said you cannot fool consumers when it comes to =uality
Nirma Premium Soap) (or the first time in the history of (CEI there was an
attempt to e@tend the ,alue for money proposition to the premium segment. *he concept
was inno,ated by none other than "irma. "irma launched "irma Premium Soap during
-..6 in the premium soap category with /35 *(C, mild fragrance, three ,ariants and a
touch of class in its ad,ertising. *he brand targeted to match the changing "irma
consumer+s profile in terms of aspiration, =uality consciousness and image perception.
*he brand has started picking up ,olumes in the premium soap market which is
characterized by large number of brands and cut throat competition. "irma Premium has
been able to differentiate itself in this cluttered market its uni=ue packaging and e@clusi,e
ad,ertisement.
Nirma #ime Fresh was launched in -..4 with absolutely no ad,ertising support.
*he lime segment of the toilet soap market was growing at a sedate rate, prior to the
launch of "irma 'ime (resh. 'aunch of "irma 'ime (resh saw the ,olumes of the
segment grow at more than -35. 0uring the first year of the launch "irma 'ime (resh
o,er took the largest selling brand in the lime segment. *he product is priced
competiti,ely with /35 *(C content and strong tingling lime fragrance. *he commercial
was aired during the later part of the year which saw the ,olume grow rapidly. *he
commercial shot at Caldi,es and Switzerland with a new and young face was e=ually
liked by consumers. *he successful launch was termed as the se,enth best launch of the
year -..4;./ by Dusiness Standard. *here in no looking back and today "irma 'ime
(resh is the undisputed market leader in the lime segment and is gi,ing shi,ers to the
competition. *he product is a,ailable in 48 grams and -83 grams.
Nima Rose) *he remarkable and phenomenal market response recei,ed by "ima
ose soap within just two months of its launch has once again pro,ed the merits of
"irma+s commitment towards its consumers. "ima ose soap has got an e@ceptionally
fine perfume of rose that lingers around your body for a long time e,en after you bath.
0ue to high *(C 9*otally (atty Catter: content, it pro,ides one of the nicest baths. *his
brand has already car,ed niche in its particular segment by achie,ing leadership position
just within tow months of its launch.
Nima #ime, the first product in the "ima range of products has a ,ery high *(C
content and was introduced in K1 ; + ./ when the astounding success of "irma 'ime
(resh Soap prompted competition to launch lime ,ariants in the same price segments.
"irma is committed to the concept of umbrella branding. <e ha,e reaped benefits of this
strategy right from our inception till date. In the past, we ha,e faced umpteen numbers of
situations where the competition introduces special campaigns to draw away the
consumer+s attention from our core brands like "irma 0etergent Powder, Super "irma
0etergent Eake, "irma Deauty Soap, "irma 'ime (resh Soap, etc. *he purpose was to
lure away consumer attention from "irma 'ime (resh Soap by temporarily modifying the
product. <e, at this point of time introduced a +fighter brand+ called "ima 'ime to
pro,ide at shield to our core brand ; in this case +"irma 'ime (resh Soap+. *he success of
"ima 'ime has been the cornerstone in "ima brand growing into a full fledged business
Nima Sandal) *his soap was launched in K1 ; +... B,er a period of time, the
Indian toilet soap market has fragmented and has seen the emergence of prominent
segments such as Sandal, ose, Lasmine, Dody moisturizing soaps, $erbal etc. "ima
Sandal is "irma+s offering in the ethnic sandal segment. <ith a rich and e@otic perfume
and /35 *(C content, this toilet soap is a,ailable in a -33 gram packing. "ima Sandal is
promoted by a *> commercial shot at e@otic locales depicting the form of 1-st Eentury
Indian woman. #arly market indication promises this brand to be the future no.- in this
segment.
Nima +erbal is the emanation of "irma+s =uality and caliber. "ima $erbal is
ingrained with benefits that accrue from using ,arious herbs, shrubs, medicinal plants and
,arious day;to;day commodities like sandal wood, lemon, turmeric, coconut, tulsi, neem
etc. that are gifted to mankind by nature. "ima $erbal is the nature+s legacy. It is
reflection of "irma+s con,iction of GEare (or *he nature+s legacy. It is reflection of
"irma+s con,iction of GEare for the EonsumersG. It was launched in K2, 1333 with a 4/5
*(C content in a -33 gram packing.
Nirma +erbalina) "irma has in,ariably identified the ner,e of the market and
answered it at the proper time. <e addressed the ayur,edic and medicated soap segment
with "irma $erbalina. 'aunched in K2 ; 1333 with a high *(C content, +$erbalina+ is
"irma+s latest introduction in the range of toilet soaps. *he natural commodities that are
shown on the wrapper blend ,ery well with the green colour of the eye;catching pack.
!,ailable in a -33 gram packing size, "irma $erbalina is the +"atural flow of freshness+.
It is "irma+s yet another impression of +Detter Products, Detter >alue, Detter 'i,ing+.
$erbalina has an e@ceptional long;lasting, heart;capturing aroma.
'&?#+ P+'D:(&S-
-. $air care
a. "irma Deauty Shampoo
b. "irma Shikakai
1. *oothpaste
a. "irma *oothpaste
2. Iodized "irma (ree (low Salt
7. Industrial chemicals
P+(#
I,ory tower theories are rethinking their business basics;thanks to &arsanbhai
&.Patel. *aking on the might of a multinational, his;priced detergent "irma captured a
majority market share arresting the sales and growth of a consumer giants up market
brand. !mong the greatest success stories in the annals of marketing management in
India is that of a low;priced detergent of reasonably good =uality which, in the course of
a mere decade, put the skids on a product that was considered the pride of a powerful
multi;national. *he story of "irma has become a classic as a marketing case;study. !nd
the story of its progenitor is as genuine and romantic a tale of rags;to;riches as one could
hope to find anywhere.
(or harried housewi,es, struggling to balance their monthly budgets, "irma came
as a boom. It was much cheaper than Surf, which had already gone well out of their
reachM and it washed clothes nearly as well. Its cleansing power was far superior to that of
the slabs of cheap washing soaps that had been their sole alternati,e until then. Dy the
early -./3s the burgeoning sales of "irma reached a rate of growth that was twice or
thrice that of the industry in general. Coreo,er, "irma operated in the small;scale sector
and, therefore sa,ed an enormous amount of e@cise duty that multinationals had to pay on
e,ery kilo of detergent produced. *he latter simply could not hope to bring the price
down to a le,el that was attracti,e enough for the middle and lower;middle classes,
which were the bulks segments for "irma sales.
*he pricing policy adopted by "irma for its "irma washing powder i.e. ade=uate
Kuality at an !ffordable price has challenged the mighty $''s Surf.
"irma <ashing Powder
-kg
-/.33
"irma <ashing Powder
833grams
..33
#,en the second product that &arsanbhai introduced;a low;priced toilet soap,
which he thoroughly test marketed in Iujarat before going national with it in -..3;hs
been faring well. "irma toilet soap retails at a mere s.1N; with the shopkeeper allowed to
retain 18 paisa behind each cake sold. *he "irma name itself was a guarantee of =uality
for the consumer smiles the businessman. It found ready acceptance. *oday, "irma+s
toilet soap products are priced in the range of s 6;.. "irma 'ime (resh, for instance,
commands a price of s / for 48 grams, while "irma Premium is priced at s .. "irma
Dath, a popular soap, is priced at s 6. In comparison to "irma+s price range, $''+s toilet
soap brands are priced at a slight premium. 'ifeDuoy is priced at s -7, and 'ifeDuoy
Iold at s .. *he price of e@ona is s ..83, while that of 'iril, which competes with
"irma 'ime (resh, is s -2.
,hus it is a &ell !no&n %act that Nirmas best ni-ue Selling
Proposition is Price
*he result of there cost effecti,e product offering is that though the industry has
been growing at the rate of -8 per cent annually, "irmas growth has been at least 23;28
per cent a year for the last few years.
"irma has been successful in keeping its prices at such affordable le,els
primarily due to their strategy of backward integration projects. *hese projects had been
undertaken with a strategy to become the lowest cost detergent manufacturer in the
world. Self sufficiency in key raw materials will gi,e protection against commodity
cycles besides yielding substantial sa,ings in raw material cost. *he company estimates a
total cost sa,ing of 185 in material and handling costs due to the backward integration
projects. *he '!D plant has yielded about -15 cost sa,ings and the company e@pects a
similar cost sa,ing of about -1;-85 once the soda ash plant stabilizes. B,erall the
backward integration has yielded a cost sa,ing of s3./;-bn last year. Post completion of
backward integration the company now plans to focus on building large ,olumes and
gain from economies of scale.
*ill -./8 the "irma ingredients were simply mi@ed by hand thus re=uiring neither
machinery nor capital in,estment. 0ue to the scale of his product and the simple non;
mechanized production process, "irma gained a number of ta@ and e@cise benefits for not
using electricity. Since "irma was a small;scale local ,enture, they did not ha,e to pay
e@cise duties that were le,ied on multinationals.
!nother area where "irma sa,ed millions was in labor costs. Deing a cottage
industry "irma was not compelled to abide by minimum wage rules. *o maintain low
costs &arsanbhai used contract workers who were paid s. /8 per ton 9In -./8 O- %.S P
Indian upee -1.26/:
-
for mi@ing raw materials and then bagging them into -333 bags of
- kg each. Payment was made according to work done and since labor was not
permanent no additional o,erhead for benefits etc. needed to be paid. It was not until the
mid /3s that "irma started to mechanize their production process, howe,er by then they
were an already well;established name. In -./. "irmas labor costs for /333 workers
was estimated to be between s -8;13 per person day in comparison to $'' who paid
their semi;skilled workers appro@imately s 23;73 per person day. 9In -./. O- %.S P
Indian upee -6.118:
1
-
1
SPP#. C+A/N 0F N/RMA:
Nirma Limited markets its products through its fully owned
subsidiary Nirma Consumer Care Limited (NCCL), which was
incepted in 198! NCCL in turn resells these products in the
market under the umbrella brands "N#$%&' and "N#%&' along
with e(tensions!
)he distribution strength of Nirma is based on mutually
rewarding and satisfying relationship!
Nirma pioneered the concept of flat distribution network! Nirma
Consumer Care Limited operates with two parallel distribution
networks! )he N#$%& brand is marketed through the first
network, which consists of about *+ e(clusi,e distributors! #t is
one of the lowest cost -%C. distribution channels of the
country!
/rincipal Channel 0Nirma /roducts12
Lowest Cost system in #ndia
3peed in distribution
-le(ibility
)he N#%& range of products is marketed through a parallel
marketing network that comprises of more than 4+++
distributors!
/arallel Channel 0Nima /roducts12
5ider $each
3peedy %arket #ntelligence
Competiti,e edge 6 7etter focus
Complementing /rincipal Channel
&ll N#$%& and N#%& range of products ha,e a retail reach of o,er
two million retail outlets and more than *+ million loyal
consumers spread all o,er the country! )he Company has been
successful in establishing an e(tremely good urban as well as
rural presence through the two distribution channels! )he
distribution channels ha,e played a significant role in making
Nirma a household name! )he efficient network has made Nirma
5ashing /owder and Nirma 8etergent Cake, the brands with
highest penetration in the respecti,e product categories in the
market! )he network is well e9uipped to meet the demands of
the loyal consumers of the Company across the country!
)he robust network ensures the a,ailability of ,arious products
at different retail outlets across the nation! )he 8istribution
channel is geared up to enhance trade relations, build up the
retailer base by pro,iding ,arious benefits and incenti,es,
organi:e and implement different acti,ities to generate sales and
manage numerous other programmes, schemes and acti,ities
concentrated towards business de,elopment!
DIS,RIB-,I.N
In its incipient days &arsanbhai Patels distribution network and sales
force was a one;man teamQ..himself. &arsanbhai affected his deli,eries of washing
powder on foot. !s the popularity of "irma grew with a spread of positi,e word;of;
mouth &arsanbhai adopted the time;honored Eoco Eola ma@im that his product should be
a,ailable within an arms length of desire. So he concentrated on widening his
distribution networkM and "irma began surfacing all o,er Iujarat, in scruffy little shops
in e,en the remotest ,illages. !s the products fame spread, agents from all o,er the
country began writing in, and e@pressing their willingness to operate on the tiny margins
that the businessman ga,e. 0istribution is clearly the key to rural marketing, which
"irma has pioneered o,er the years. "irma has a 283 strong sales force, a distributor
strength of 733 and a retail reach of o,er - million outlets. <hen setting up a distribution
system &arsanbhai was e@tremely aware of the importance of keeping costs down. Bnce
demand for "irma had outgrown his ability to deli,er on bicycle he mo,ed on to ,ans
and then later to trucks. "irma had neither a field sales force nor owned a distribution
network. &arsanbhai negotiated prices with truck and ,an suppliers on a daily basis.
!s sales grew &arsanbhai e,entually hired stockists 9those who stocked additional
=uantities of the goods: as commission agents. Bn the one hand it helped him a,oid
central sales ta@ and the stockists were responsible for all transportation, octroi,
2
handling
and deli,ery costs. *here was also a strict system of protocol and distribution depended
on prepayment for stocks so as to minimize risk for "irma.
"irma sells o,er /33,333 tones of detergent products e,ery year and commands a
285 share of the Indian detergent market, making it one of the worlds biggest detergent
brands. *he brand promotion efforts are complemented by "irmas distribution reach and
market penetration, through a country wide network of 733 distributors and o,er 1
million retail outlets, making "irma products a,ailable from the smallest rural ,illage to
the largest metro.
*he company has set up for "ima a parallel distribution and sales channel
consisting of -833 distributors and an independent sales force. ! two;tier network, the
"ima distribution channel is +flat+ enabling swift market response. *he company took
2
great care that the new brand did not cannibalize on the e@isting brands. *he
"ima portfolio today complements the "irma range, furthering the company+s strategy of
>alue for Coney

Level of Channel Distribution)
Eompany manufacturing unit
Eonsolidator
<holesaler
Semi;<holesaler
etailer
Eonsumer
NIRMA COMPANY DISTRI!TION IN
YEAR"#
0
10
20
30
40
50
60
70
80
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
East
West
North
!ccording to /Product Distribution0 .