Product and Marketing Effort Analysis of NIRMA

Submitted To Dr. Vinay Sharma

Pallavi
Roll No: 40

Table Of Contents

S.No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Title Abstract Introduction Nirma-History The Indian detergent Market Evolution of the Indian detergent Market: Flash Back Nirma Ltd.-Company Profile A New Business Model : The Nirma Way Marketing Strategy: Blue Ocean strategy STP and 4Ps IMC Management Building brands and brand equity Supply Chain Management Financial Planning Outcomes References

Page No. 3 4 4-5 5 5-7 7-9 9 10-11 11-13 13-15 15-17 18-19 19-20 20-21 22

Abstract Aided by an aggressive pricing strategy and apt product positioning, Nirma has managed to carve a niche in the lower end of the detergents segment. Buoyed by the success in the detergent market, the company ventured into the toilet soap segment. The Nirma success story is a result of its founder and Chairman, Dr. Karsanbhai Patel's relentless focus on quality, cost and value. The distribution model, sustained line extensions and umbrella branding strategies have enhanced the brand's cost leadership. Today, the company's two brands, Nirma and Nima, are distributed through more than two million retail outlets across the country. To make inroads into personal care products, Nirma had to tap chemists, paanwalas and other retailers in addition to its regular two million retailers. Since the launch of Nirma detergent powder in 1969, the Nirma portfolio has expanded to include fabric care products, personal care products, food products, packaging and chemicals. This was primarily to cater to the changing business environment. The company has a significant presence in the detergent powders, cakes, toilet soaps as well as in the scouring bars category. However, the underlying philosophy remains consistent - to deliver value-for-money products to consumers.

Introduction Low income markets present a prodigious opportunity for the worlds wealthiest companies-to seek their fortunes and bring prosperity to the aspiring poor. -by C.K.Prahalad and Stuart L.Hart Nirma Ltd. - Some facts Vision, Mision & Philosophy : Nirma is a customer-focused company committed to consistently offer better quality products and services that maximise value to the customer. Date of Establishment: 1980 Revenue: 742.623 ( USD in Millions ) Market Cap: 40684.7243933 ( Rs. in Millions ) Total Income: Rs. 31696.8 Million ( year ending Mar 2010) Net Profit: Rs. 2379.4 Million ( year ending Mar 2010)

Nirma History It was in 1969 that Dr. Karsanbhai Patel started Nirma and went on to create a whole new segment in the Indian domestic detergent market. During that time the domestic detergent market only had the premium segment and there were very few companies , mainly the MNCs , which were into this business. The new yellow powder was priced at Rs. 3.50 per kg, at a time when HLL's Surf was priced at Rs 13. Soon, there was a huge demand for Nirma in Ruppur (Gujarat), Patel's hometown. He started packing the formulation in a 10x10ft room in his house. Patel named the powder as Nirma, after his daughter Nirupama. Patel was able to sell about 15-20 packets a day on his way to the office on bicycle, some 15 km away. By 1985, Nirma washing powder had become one of the most popular, household detergents in many parts of the country. It is a customer-centric company that believes in constantly improving the quality of its product. By 1999, Nirma was a major consumer brand offering a range of detergents, soaps and personal care products. . The company's mission to provide, "Better Products, Better Value, Better Living" contributed a great deal to its success. In keeping with its philosophy of providing quality products at the best possible prices, Nirma brought in the latest technology for its manufacturing facilities at six locations in India. Nirma's success in the highly competitive soap and detergent market was attributed to its brand promotion efforts, which was complemented by its distribution reach and market penetration. Nirma's network consisted of about 400 distributors and over 2 million retail outlets across the country. This huge network enabled Nirma to make its products available to the smallest village. Nirma successfully countered competition from HLL and carved a niche for itself in the lower-end of the detergents and toilet soap market. The brand name became almost

synonymous with low-priced detergents and toilet soaps. However, Nirma realized that it would have to launch products for the upper end of the market to retain its middle class consumers who would graduate to the upper end. The company launched toilet soaps for the premium segment. However, analysts felt that Nirma would not be able to repeat its success story in the premium segment. By the year 2000, Nirma had a 15% share in the toilet soap segment and more than 30% share in the detergent market. The Indian Detergent market The Indian fabric wash products market is a highly fragmented one. Of the 23 lakh-tonne market, laundry soaps and bars made from vegetable oils account for around seven lakh tonnes with synthetic detergents making up the rest. Washing powders are categorized into four segments - economy (selling at less than Rs.25 per kg), mid-priced (Rs.25 - Rs. 90 per kg), premium (Rs. 90 - Rs. 120 per kg) and compact (selling at over Rs. 120 per kg). The compact, premium and medium priced segments together account for 20% of the volume share and 35% of the value share. The economy segment make up the remaining lion's share of the market. The fabric wash industry in India is characterized by low per capita consumption, especially in rural markets. The major players in the Indian detergent market are HLL, P&G, Nirma and Henkel (through its joint venture with SPIC, a leading petrochemical company based in Chennai). Evolution of the Indian detergent market : A Flash Back Looking specifically at the Indian detergent industry, HLL was the undisputed leader. Traditionally, Indians had used bars or tablets of soap to wash their clothes. Clothes washing had involved scrubbing a wet garment with soap and then beating it with a club (similar to a baseball bat) or against a stone. HLL changed everything by introducing the revolutionary Surf washing powder in 1959. By introducing a washing powder they encouraged people to move from the club to the bucket. Part of their marketing strategy involved demonstrations of how clothes are washed in buckets with a washing powder. Surf was an immediate success and occupied the top spot in the national detergent market. While the concept of a detergent was every Indian housewifes solution to gruelling hours of clothes washing, only a fraction of them could afford Surf. Bright blue in colour and packaged in a large colourful carton (like the breakfast cereals in the United States) Surf was too expensive for rural India. The rural poor could not afford Surf and so continued to use bars and clubs. Surf was expensive to begin with, and with the early 70s came a rise in the price of crude oil and a massive increase in the cost of raw materials. Surf doubled in price from 1974-75 and so became even more unreachable for the rural people. At this time a host of new medium sized competitors came into being but HLL maintained dominance. By 1977 Nirma was the second largest volume seller in the country. Despite this, no other company took Nirma seriously. The marketing gurus of the world believed that Nirma was a regional product that was seeing temporary success and that its bubble would soon burst. They predicted that at such a low sale price, the margins Karsanbhai was making per unit would not sustain his business for long. Moreover, HLL completely ignored Nirma and believed that it was no threat at all. HLL considered themselves a superior company with a superior brand, and there was a strong belief that the only clients worthwhile pursuing were

the Indian middle class and elite. Since Nirma was not in their market segment, HLL did not consider them a threat. The general belief was that rural Indians were poor and the rural sector was too disorganized to bother with. HLL had disregarded a huge market segment that due to its sheer volume held great promise and potential. By ignoring the lowest rungs of society, HLL was in danger of being toppled from the leading position. The question is why had HLL ignored the rural markets? In order to understand the dilemma facing HLL at this time it is important to know how traditional business is conducted, especially as far as multinational corporations are concerned. C.K. Prahalad and Stuart Hart help us to understand this by looking at the market as a pyramid. The Top tier of the market consists of about 75-100 million people who earn more than $20,000 a year . This group consists of the elite/ middle and upper-income people in our societies. Most of these people live in the developed world and a few in the developing world. The second and third tiers consist of the rising middle classes, living mostly in developing countries and earning between $1,500 and $20,000 a year. Prahalad and Hart estimate that between 1,500-1,750 million people live in Tier 2 & 3. Finally, we come to the bottom of the pyramid, Tier 4, which consists of around 4 billion, people who earn less than $1,500 a year. Most of the people in Tier 4 live in the developing world, however there are some who live in urban inner city areas in both the developed and the developing countries. Typically, MNCs have focused on the first tier as it allows for the highest margin of returns. In many cases the second and third tiers of the pyramid have also been focused on, however, the people at the bottom of the pyramid have usually been ignored. While those in Tier 4 have been ignored for a host of reasons it is interesting to notice that by concentrating on the top three tiers MNCs have marketed to only 30% of the worlds population. MNCs have ignored Tier 4 because it has always been assumed that those living in Tier 4 do not have any disposable income and so cannot afford the products produced by the MNCs. Nirmas success in rural India dispelled the myth that rural consumers are poor and do not have the disposable income to buy consumer goods. However, the additional reason that MNCs were wary of Tier 4 markets was because these markets constituted what is called the disorganized sector where a lack of infrastructure and development hinder effective marketing and distribution of products. Finally, due to high overhead costs most MNCs are not able to price their goods in the manner that local companies can thus, refraining from entering the rural market due to their inability to be price competitive. Looking specifically at India it is easier to understand what working in rural markets entails. In the early 1980s the total population of India was around 750 million of which 70% lived in rural areas. Thus Indias rural population, which was comprised of 525 million people, was equal to almost twice the population of the United States of America. Indias rural market comprised 12% of the worlds population. With an estimated annual growth rate of 1.7%, India is the second most populous country in the world. The sheer size of the rural Indian market was the greatest attraction for entering it.

Challenges at B.O.P in India Despite the sheer size and potential volume of business in rural areas, HLL stayed away from the rural Indian market for the simple reason that it was physically very difficult to penetrate. The nature of rural markets has always been very complex and rural India presented a number of unusual challenges for HLL. In India the rural client group lived in approximately 570,000 villages spread across the Indian countryside. Approximately 90% of Indias rural population lived in small way-out villages with populations of less than 2000. Most villages neither had electricity nor running water. Access to telephones and the Internet was unheard of. Due to a lack of infrastructure, only 45% of the villages could be reached by road, and few of these were all weather roads. HLLs decision to stay away from the rural markets was not limited to the physical challenges of the land, but also by the so-called social and cultural challenges of the people. In trying to sell their product in rural areas HLL would be dealing with a client group that had never before been focused on by multinationals. Banners and leaflets alone would not be effective since only 43% of rural Indians could read. Moreover, India was a country where 15 recognized languages were spoken along with over a few hundred dialects so any media campaign would have to be effectively translated. HLL would have to tackle the challenge of marketing a product in the absence of conventional marketing and advertising tools. Since only 57% of the rural population was reachable by mass media HLL could not depend only on television or radio to get their message across; they would have to be innovative. Nirma Ltd. - Company Profile Nirma Limited (Nirma) was incorporated as a private limited company on 25th February 1980 to undertake the business of manufacturing and selling Synthetic Detergents, Soaps, Chemicals and Allied Products. It was promoted by Karsanbhai Patel as his pet project. The Company is engaged in the consumer goods and industrial products sector, having major manufacturing plants for production of various products includes Soda Ash, Linear Alkyl Benzene, Soaps, Detergents, Edible Salt, Industrial Salt and Others (Alfa Olefin Sulfonate, Sulfuric Acid, Glycerine and Single Super Phosphate). It also has separate unit for packaging. Nirma markets its products through its wholly owned subsidiary, Nirma Consumer Care Limited. The Company came out with its maiden public issue of Equity Shares in the year 1994. During the same year, Nirma also ventured into manufacture of Fatty Acid, Glycerine, Toilet Soaps, Sulphuric Acid and Alfa Olefin Sulphonate (AOS). The associated companies including Nirma Detergents, Shiva Soaps and Detergents, Nirma Soaps and Detergents and Nilnita Chemicals were merged with the company during the period of 1996-1997. Nirma Consumer Care was formulated as a wholly-owned subsidiary of the company by the company in the year of 1997 itself. During the year 2002, the company had undertaken the manufacturing process of toilet soap under the brand name 'Camay' for its subsidiary Nirma Consumer Care Ltd which obtains license from Procter & Gamble Home Products Ltd. In the same year of 2002, the company had closed its Bangladesh unit due to low sales volumes and entered into foods category with launch of Nirma Shudh Salt. Nirma is one of biggest players of detergent market in India with a share of 38%, and the second largest player in toilet soap market with a share of 20%. Nirma entered in toilet soap market in 1990.

Product Classification Some of Nirma's products are: Consumer Products Detergents Edible Salt Soaps Scouring Products Industrial Products LAB (Linear Alkyl Benzene) Soda Ash Pure salt AOS (Alfa Olefin Sulfonate) Sulfuric Acid SSP (Single Super Phosphate) Sodium Silicate Glycerine Vacuum Evaporated Iodized Salt

Product Portfolio Detergents: It manufactures a wide range of detergents such as spray-dried powder, compact dry mixed powder, cakes and scouring products like Nirma Bartan and Nirma Clean. Toilet soaps: It manufactures soaps such as beauty soaps, carbolic soaps and premium soaps. It has Brands like Nima Rose, Nima Sandal and Nirma Lime Fresh. Packaged food Nirma has also entered the packaged food segment through its Nirma Shudh iodized salt. Industrial products Nirma has also entered into manufacturing of industrial products such as LAB (linear alkyl benzene), glycerin, AOS (alfa olefin sulfonate), sulfuric acid, sodium silicate, soda ash and salt. Fertilizers It also manufactures single super phosphate.

Milestones It is the largest player in detergent market in India with market share of 38% . It is second largest toilet soap marketer with market share of 20% in the country . Nirma Shudh salt is second largest salt brand in some parts of the India. Awards Nirma was awarded Excellence award for Best Advertisement of the year at FMCG awards 2003. It won Most Popular Brand in detergent powdereconomy category at FMCG awards 2003. It was 9th largest FMCG brand of the country according to AC Neilsen Retail AuditBrand Equity in 2004. Dr. Karsanbhai Khodidas Patel has been conferred with Padma Shri Award for the year 2010.

What next? Nirma is set to enter the cement manufacturing segment. It is planning to set up to set up a cement facility with a capacity of 1.91 million tonnes per annum at Tal Mahuva in Bhavnagar district, Gujarat. It has also acquired land for a captive power plant to generate 50MW of electricity. The government of Gujarat has sanctioned the supply of sweet water from Narmada pipeline for the cement project. A New Business model: The Nirma Way By 1984, Nirma occupied the position of No. 1 brand in Asia leaving Surf far behind. Everybody was shocked, most of all HLL. The key question is: how was Karsanbhai able to achieve such tremendous success in an arena that had been dominated by HLL for so many years? Karsanbhais response to this was that he saw an opportunity where others had not bothered to look. He said, I found a massive market segment that was hungry for a good-quality product at an affordable priceso I decided to keep my margins very low, and was happy if I could net between three and five percent profits really came from the huge volumes we generated. Karsanbhai was a genius to have recognized the opportunity provided by this rural market and he was able to successfully give them the product that they wanted at the price that they wanted.

Marketing Strategy: Blue Ocean strategy Sabki Pasand Nirma. With their launch of cheap washing powder in 1980s, they captured a market that HLL ignored and even sneered at. They grew large enough to actually steal market share from HLL's Surf. They thus, not only captured a bigger portion of the pie, they also enlarged the pie itself. Nirma became a huge success and all this was a result of Karsanbhai Patels entrepreneurial skills. Nirma Overtakes Surf: The War of the Bubbles Nirma provides a fine example for a price-led marketing strategy. Nirma entered the detergent market of India at a time when Hindusthan Lever Limited (HLL), an FMCG giant, with its Surf, had established a near monopoly in the business. Nirma succeeded through its priceled strategy. HLL marketed Surf, taking to the differentiation route; the differentiation theme was Surf washes whitest. While it may seem that Nirma was of inferior quality, housewives of rural India were not objecting. Karsanbhais product was in high demand. At one-third the price, as long as Nirma washed almost as well as Surf, the consumers did not mind. Going from 0% of the market share in 1976 to 61.6% of market share in 1987 Nirma had pushed HLL from the top. At the same time, until 1989, Surf remained between 2.5 to 3.6 times as expensive as Nirma. HLL was astounded by the growth of Nirma. HLL had a very clearly defined idea of what the specific ingredients of a detergent should be and what ratio they should be mixed in. According to HLL, Nirma was a low quality product. HLL commented that Nirma did not contain any whitening ingredient, had insufficient active detergent, had no perfume and was rough on the skin. The rumour was that Nirma contained lower levels of active detergents and more fillers and soda ash. Despite all these factors Nirma had outperformed Surf in the market. HLL then launched Project STING -- the Strategy to Inhibit Nirma Growth to get back its market share. Differentiating on the price front., to attract a large number of users may work well as an entry-level strategy, it may/may not be successful for the long-term. Unless the company has some significant cost advantages, this low-pricing strategy is not likely to last in the longterm. Companies cannot survive only with a price-low strategy. It may work well as an entry-level strategy to grab your first chunk of consumers, but the low-price strategy all by itself, isnt a long lasting one. The company has to also make money/ profits out of it. Pricing attractively coupled with earning great profits out of it is a long-lasting strategy. But a difficult one!!! So how did Nirma make this a winning strategy for the long-term?

Only a company with the lowest cost can compete on price and win. Being the lowest-cost producer (having significant cost advantages), when coupled with large volumes helps a company grow its sales & profits, even when it prices its products competitively. With a big chunk of the Indian consumers being highly price sensitive; this advantage helps establish the company as an important/significant player in that segment 1) Working on high-volumes: What happens when a company offers very low & attractive prices for its product/service, so low that nobody can match? Very obviously, it attracts a large number of customers which leads to increased sales volumes. For this the company needs to gear up everything for the large volumes i.e. procurement, manufacturing, selling etc in such a manner that it gives them a cost advantage. 2) Working on a cost-leadership strategy i.e. the lowest-cost producer: This can be achieved by a) Working on low-costs for everything; procuring raw material, low manufacturing expenses, low selling & marketing expenses etc b) Having the power to negotiate lower costs with its suppliers. This power usually comes from long-term relations with suppliers, placing orders well in advance (by forecasting demand). c) If the companys been lucky enough to get their assets really cheap (maybe while starting up)

STP and 4Ps Nirma had built cost leadership right from the beginning. It was this cost leadership built early on that enabled Nirma to follow the price-based marketing strategy. Taking advantage of the concessions as an SSI unit and choosing the price conscious segment as its market, Nirma Chemicals offered a low price brand and promoted it aggressively. Surf was sold at a price of over Rs. 32 per kg. Nirma priced its detergent at Rs. 10.50 per kg. It relied on low cost technology, process and raw materials. Nirma kept growing in both volume and market share. HLL had to defend Surf with all its might, the company stepped up its promotion of Surf, relying heavily on the differentiation theme. But this was not enough to check the growth of Nirma had chosen. HLL had been operating as a matter of policy, a differentiation-led strategy, highlighting the distinctive merits of Surf as a detergent and marketing it as premium product. HLL was successful for two decades, and it had to change its strategies. It has decided to enter the low priced segment, Wheel which is positioned against Nirma. Wheel was priced at Rs. 11 per kg. In just about 10 years, Nirma became a Rs. 1,000 crore business.

The conclusion is that Nirmas price-led strategy was so successful that even the market leader, who was all along following the differentiation-led route, was forced to review its strategy. While introducing toilet soaps and detergents in the premium segment, Nirma relied on its time-tested weapon Price. The company planned to concentrate on volumes in these segments as well. But there was a change in the margins given to retailers. Unlike the economy products, where the cost benefits were passed on to the consumers, Nirma passed on this benefit to the retailers. It gave them huge margins. For instance, for Nirma premium soap, it offered 52% and for Nirma shampoo, it offered an unbelievable margin of 140%. Unlike detergents, the soaps and shampoo market was highly fragmented. There were about 15-20 brands, and it was difficult for any soap to get a sizable market share. Moreover, this market was less price sensitive. In India, only 30% of the population used shampoos and more than 70% of this group was in the urban areas. Though the perceived potential of the rural market was very high, in actual practice, it was difficult to persuade rural folk to use shampoos. .

Nirma Limited markets its products through its fully owned subsidiary Nirma Consumer Care Limited (NCCL), which was incepted in 1985. NCCL in turn resells these products in the market under the umbrella brands NIRMA and NIMA along with extensions. The distribution strength of Nirma is based on mutually rewarding and satisfying relationship. Price Wars : HeLL breaks loose When Nirma, a small insignificant player, began challenging Surf's dominance in the detergent market, HLL launched various counter measures. The entry of P&G onto the scene further intensified the competition, creating a new market segment - the compacts. HLL has taken retaliatory steps to keep P&G in check and retain its leadership position. Both HUL and P & G had been slashing their prices to grab a higher market share when it comes to the nearly saturated domestic detergent market. There has been a price war between the two majors in the detergent segment for years, which has now eased off, but will their rivalry end in the near future? The price war started in 2004 when P&G cut the prices of detergents by over 50% to ramp their volumes. While the price of Ariel had been slashed from Rs 70 to Rs 50 for a 500 gm pack, Tide was available at Rs 23 for a 500 gm pack, down from Rs 43 earlier. P&G had changed its strategy of being value focused -- to betting big on volumes. HUL responded by slashing the prices of their premium brands Surf and Rin. Before that also, P&G had slashed prices of sachets of Ariel and Tide from Rs 3 and Rs 2 to Rs 1.5 and Re 1, which boosted the sales of these detergents by almost 100%.The market penetration in the detergent market is 88% for the whole of India which leaves very little scope for expansion, but with more players vying for this share the war is set to heat up. This move is likely to bring about a dramatic change in the consumer profile of each segment. The impact would be felt by brands in all segments as mid-priced users may upgrade to premium brands, while popular brands may face volume pressure as customer upgrade to more affordable mid-priced brands. All leading national players in the industry HLL, Nirma, P&G and Henkel as also the smaller regional brands are likely to witness a huge realignment in their customer base. IMC Management While advertising did not appear as a cost in its initial budgets, by the late 70s as televisions slowly started to spread into rural India, so did the Nirma ad campaign, with its simple message and catchy jingle. By the early 80s Nirma became synonymous with good quality and lowprice. Initially, the advertising spend of the company was very low, as compared to other FMCG companies. Nirma spent only 1.25-2% of its turnover on advertising as compared to the normal 6-10%. Nirma always preferred to place the product on the shelves first, receive feedback, and then create an enduring ad campaign. The kind of impact that Nirmas simple Dancing Girl advertisement managed to have on prospective buyers was phenomenal. It perhaps was the most famous audio-visual of

its times. And it remained etched in the minds of people for a very long time. The release of Nirmas jingle on television in 1982 stoked the brands appeal even more. The simple and catchy jingle Dudh si safedi Nirma se aye, rangeen kapda bhi khil khil jaye was first aired on radio in 1975, and was broadcast on television in 1982. Sumanto Chattopadhyay, Executive Creative Director, South Asia, O&M, says: When it first came, Nirma shook its competitors and the Nirma girl stole every housewifes heart. To this day and through the decades, the Nirma jingle has continued to echo in the drawing rooms of middle-class Indian homes. While the jingle stresses on the product, it also salutes the savvy and budget-conscious Indian housewife. Taken aback by the growing popularity of the Nirma brand, HLL was forced to come up with its campaign. The ad for its Surf detergent portrayed a smart housewife Lalithaji telling the audience that good quality comes with a good price. HLL also launched its own mass brands (Wheel, in the detergent category), which led to price wars in the category. But by then the Nirma brand was firmly entrenched in the consumer psyche. Excerpts from an interview with Mr. Sumanto Chattopadhyay, Executive Creative Director, O&M Nirmas jingle defines its DNA. What do you think is Nirmas unique differentiating factor? I think Nirma is about unabashed, unselfconscious self-belief. At a time when nobody dared to venture into territories thought to be the preserve of multinationals, Nirma arrived with the audacity of a debutante who does not know what she is supposed to be afraid of. Is it wise on the part of Nirma to continue with its jingle for so long? Washing Powder Nirma, Washing Powder Nirma... I could probably hum this jingle even in my sleep. Its as much a part of the product as are Nirmas detergent granules. The jingle has come to define the brands identity and its DNA. You cant take it away even if you wanted to. Whats more, it has become a cultural phenomenon. Excerpts from an interview with Mr. Santosh Padhi, Cofounder, Taproot India The Splash ad campaign for Nirma was his brainchild. Nirmas Brand Pitch is level-headed How powerful is brand Nirma? Nirma has been there for the past three decades and its association with consumers is so old, the brand has become a part of their daily life. Even if you put the combined reach of both P&G and Unilever, there would still be more number of households that use Nirma. Just to put this in perspective, if Unilever and P&G score a 100 in terms of their reach, Nirma will score 120. That is the power of the Nirma brand.

You have done a couple of ads for Nirma. How has the positioning of the brand changed over time? Nirmas positioning has been flexible and adaptive to suit the requirements of markets in different geographies. The brand has kept constantly changing and has evolved according to the needs and demands of the market. The brand positioning of the product in the North is not the same as it is in the South. Companies do a lot of research to define their positioning and the perception they want to project. But Nirma is a company that does not do any research and still has been successful. How would you define the core essence of the Nirma brand? I think the core of the Nirma brand lies in it being a purely Indian brand. The brand has a friendly and humble air about it, which has helped it reach the hearts of millions of families in India. The brands pitch over the years has been very level-headed and consumer friendly. It has never hyped its pitch, nor has it over promised and under-delivered. Its brand philosophy has always been in giving its customers their due. Nirmas success is an outcome of its brand equity built over time. What is that unique differentiating factor that marks out Nirma from its competitors? Nirma has been able to build a very deep bond of trust with its customers, which helps to differentiate it from other brands like Ghari and Wheel. Nirma is all about being a dependable, trustworthy brand, and its target market has come to accept this wholeheartedly. However, according to Samsika Marketing Consultants, Nirma's marketing firm, Nirma was considered to be a cheap brand. Many people were almost ashamed to admit that they were using it. To shed this image, in the late nineties, Nirma released corporate advertisements worth Rs 10 bn throughout India. The stockists were also responsible for promotions and they funded 50% of promotional expenditure for their goods. Nirmas sales reached a rate of growth that was two to three times that of the industry in general. As a result of all the above measures Nirma survived and flourished on what looked like a miniscule margin per unit.

Building Brands and Brand Equity

Figure3 : Customer Based Brand Equity Pyramid

Branding ladder: 1) Brand identity 2) Brand meaning 3) Brand responses 4) Brand relationships 1. Brand salience (Brand Awareness) This brand had been ranked as the Most widely distributed detergent powder brand in India. Brand Nirma has always been able to demonstrate his mass market presence. Nirma as a brand has few variants. Four of the more popular ones are Detergents, soaps, edible salt and scouring products. As a brand Nirma may be limited in its variants. But, its usages are plenty. 2. Brand Performance Ratio of detergent to other constituent makes Nirma a unique product which is good in quality and reasonable in price. Nirma is also used as cleaning agent for floor etc. in many Indian families. Nirma is regarded as a strong cleaning agent that can be used in any condition which includes hard water, tough stains and sticky dirt. Owing to its unique environment-friendly, phosphate-free formulation, the consumers became loyal to this brand, helping it to over-take the decades old brands, in terms of volumes. 3. Brand Imagery Nirma has always been embedded in consumers mind in some or other part of consumers life. Nirma is always willing to cater to its customer from every segment. Personality and values: Various dimensions of multi personality brand Nirma are as follows: a) Sincerity

b) Robust c) Competence d) Performer e) Ruggedness f) Powerful (ab jyada shakti Nirma) Its advertisement focuses mainly housewives which is a major chunk of Indian population. Nirma entered in the production of beauty bars also. Sangeeta Bijlani, Sonali bendre, Deepti Bhatnagar are some of brand ambassadors of Nirma. Time to time it kept on introducing its variants in the market like Super Nirma, Nirma popular, Nirma beauty bar and other toiletry preparations. It took advantage of word of mouth advertisement. Especially the segment in which Nirma focuses; consumers are always ready to admire a brand which gives them performance. Nirma also delivered consistent performance matching to customers need. Customers tend to use it because of its attachment to the brand in spite of presence of other similar performing brands. Brand Nirma was also notorious for its harmful effects on users hands but here also Nirma came up with Super Nirma and very well advertised this newly introduced feature. 4. Brand Judgments Brand Nirma is always considered as a non sophisticated and high performing brand as compared to any other brand present in the market. a.Perceived expertise- Nirma is a Market Leader. It always been very successful in giving tough competition to its counterparts like Fena, More, Hepoline etc .It always added innovation to its products and gave a specific product for specific customer segment e.g. Super Nirma and Nirma Popular were introduced to cater to high quality demanding customers. b. Trustworthiness- It has always proved to be a dependable brand from decades. It has always been present in the mind of Indian customers including non-users. c. Likeability- High Value for money and high Quality to cost ratio makes it an interesting, price-worthy and useful product. 5. Brand Feelings Customers are emotionally attached to the brand. Brand Nirma being a prime mover in affordable washing powder has a respectable place in Indian consumers mind. 6.Brand Resonance Brand Nirma is present in the mind of customers from long ago. Despite being a non user customers respect this brand and share a good memory and experience with the brand from its child hood days or may be experience of parents. Like a person Nirma has a glorious past which epitomizes its success and strong presence in the market even now.

Supply Chain Management a. Distribution Network In its incipient days Karsanbhai Patels distribution network and sales force was a one man team - himself. Karsanbhai affected his deliveries of washing powder on foot. When setting up a distribution system Karsanbhai was extremely aware of the importance of keeping costs down. Once demand for Nirma had outgrown his ability to deliver on bicycle he moved on to vans and then later to trucks. Nirma had neither a field sales force nor owned a distribution network. Karsanbhai negotiated prices with truck and van suppliers on a daily basis. As sales grew Karsanbhai eventually hired stockists (those who stocked additional quantities of the goods) as commission agents. On the one hand, it helped him avoid central sales tax and the stockists were responsible for all transportation, octroi, handling and delivery costs. There was also a strict system of protocol and distribution depended on prepayment for stocks so as to minimize risk for Nirma. Nirma adopted backward integration strategy for the regular supply of raw materials,90 % of which they manufacture themselves. Nirma also gave due importance to modernization, expansion and upgradation of the production facilities. The company also made sure that it uses the latest technology and infrastructure. As the popularity of Nirma grew with a spread of positive word-of-mouth Karsanbhai adopted the time-honored Coco Cola maxim that his product should be available within an arms length of desire. So he concentrated on widening his distribution network; and Nirma began surfacing all over Gujarat, in scruffy little shops in even the remotest villages. As the products fame spread, agents from all over the country began writing in, and expressing their willingness to operate on the tiny margins that the businessman gave. Distribution is clearly the key to rural marketing, which Nirma has pioneered over the years. Nirma has a 350 strong sales force, a distributor strength of 400 and a retail reach of over 1 million outlets. Nirma also curtailed its costs of distribution by eliminating intermediaries. Nirma pioneered the concept of flat distribution network. Nirma Consumer Care Limited operates with two parallel distribution networks. The NIRMA brand is marketed through the first network, which consists of about 450 exclusive distributors. It is one of the lowest cost FMCG distribution channels of the country. Characteristics of principal channel (Nirma Products) Lowest Cost System in India Speed in Distribution Flexibility The NIMA range of products is marketed through a parallel marketing network that comprises of more than 2000 distributors. The company took great care that the new brand did not cannibalize on the existing brands. The Nima portfolio today complements the Nirma range, furthering the company's strategy of Value for Money.

Characteristics of Parallel Channel [Nima Products] Wider Reach Speedy Market Intelligence Competitive Edge & Better Focus

Complementing Principle Channel all NIRMA and NIMA range of products have a retail reach of over two million retail outlets and more than 40 million loyal consumers spread all over the country. The Company has been successful in establishing an extremely good urban as well as rural presence through the two distribution channels. The distribution channels have played a significant role in making Nirma a household name. The efficient network has made Nirma Washing Powder and Nirma Detergent Cake, the brands with highest penetration in the respective product categories in the market. The network is well equipped to meet the demands of the loyal consumers of the Company across the country. The robust network ensures the availability of various products at different retail outlets across the nation. The distribution channel is geared up to enhance trade relations, build up the retailer base by providing various benefits and incentives, organize and implement different activities to generate sales and manage numerous other programmes, schemes and activities concentrated towards business development Levels of Channel Distribution Company Manufacturing Unit Consolidator Wholesaler Semi-Wholesaler Retailer Consumer Financial Planning: Its all about the money, honey!

Nirma reported net loss of Rs. 23.74 crore in the quarter ended March 2011 as against net profit of Rs. 25.99 crore during the previous quarter ended March 2010. Sales rose 8.77% to Rs. 840.91 crore in the quarter ended March 2011 as against Rs. 773.09 crore during the previous quarter ended March 2010. For the audited full year, net profit declined 68.88% to Rs. 74.04 crore in the year ended March 2011 as against Rs. 237.94 crore during the previous year ended March 2010. Sales rose 4.13% to Rs. 3246.65 crore in the year ended March 2011 as against Rs. 3117.95 crore during the previous year ended March 2010. Despite a strong presence in the detergents market and a significant share of the toilet soap segment, the stock market has been reluctant in according Nirma a status as strong as Hindustan Lever, Procter and Gamble, Britannia or other MNCs.

Figure 1: Loss of Rs. 23.74 crore for Nirma in the quarter ended March 2011 It is also interesting that Nirma has managed to post a better performance (in terms of earnings growth) compared to its peers such as Hindustan Lever, P&G and Henkel SPIC. However, the stock market appears to be hardly impressed with Nirma's performance. The reasons for the indifferent attitude are not far to seek. A few decisions taken in the past and the foray into the linear alkyl benzene (LAB) and soda ash appears to have made the market cautious about Nirma. Outcomes The company that was started in 1969 with just one man who used to deliver his product from one house to the other, today employs around 14 thousand people and has a turnover of more than $ 500 million. In 2004 Nirmas annual sales were as high as 800000 tonnes. As far as Corporate social responsibility (CSR) is concerned, Nirma has made some good efforts by starting Nirma Education & Research Foundation (NERF) in the year 1994 for the purpose of running various educational institutes. Nirma has also set up Nirma labs , which prepares aspiring entrepreneurs to effectively face the different business challenges. Nirma also runs Nirma Memorial Trust ,Nirma Foundation and Chanasma Ruppur Gram Vikas Trust as a part of their effort as a socially responsible corporate citizen. According to Forbes in 2010 Karsanbhai Patels net worth was $ 575 million.

To salute his spirit of entrepreneurship Starting your own business is like riding a roller coaster. There are highs and lows and every turn you take is another twist. The lows are really low, but the highs can be really high. You have to be strong, keep your stomach tight, and ride along with the roller coaster that you started. - Lindsay Manseau

References 1. 2. 3. 4. 5. 6. 7. 8. www.nirma.co.in www.wikipedia.org www.businessblog360.com www.scribd.com www.citeman.com www.indiainfoline.com www.icmrindia.org Prahalad, C.K and Hart, Stuart L.(2002), The Fortune at the Bottom of the Pyramid