Product and Marketing Effort Analysis of NIRMA

Submitted To Dr. Vinay Sharma
Roll No: 40

Table Of Contents

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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

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

2379. It is a customer-centric company that believes in constantly improving the quality of its product.Introduction “Low income markets present a prodigious opportunity for the world’s wealthiest companies-to seek their fortunes and bring prosperity to the aspiring poor. Patel's hometown.4 Million ( year ending Mar 2010) Nirma – History It was in 1969 that Dr. The new yellow powder was priced at Rs. soaps and personal care products. there was a huge demand for Nirma in Ruppur (Gujarat). some 15 km away. In keeping with its philosophy of providing quality products at the best possible prices.K.Some facts Vision.8 Million ( year ending Mar 2010) Net Profit: Rs. The company's mission to provide. . Soon. . Better Value. Mision & Philosophy : Nirma is a customer-focused company committed to consistently offer better quality products and services that maximise value to the customer. Nirma's success in the highly competitive soap and detergent market was attributed to its brand promotion efforts.” -by C. Patel named the powder as Nirma.Hart Nirma Ltd. By 1985. Nirma brought in the latest technology for its manufacturing facilities at six locations in India. By 1999. Date of Establishment: 1980 Revenue: 742. "Better Products. which were into this business. Karsanbhai Patel started Nirma and went on to create a whole new segment in the Indian domestic detergent market. Nirma washing powder had become one of the most popular.Prahalad and Stuart L. which was complemented by its distribution reach and market penetration. The brand name became almost . This huge network enabled Nirma to make its products available to the smallest village.50 per kg. 3. in Millions ) Total Income: Rs. During that time the domestic detergent market only had the premium segment and there were very few companies . Nirma successfully countered competition from HLL and carved a niche for itself in the lower-end of the detergents and toilet soap market. Nirma was a major consumer brand – offering a range of detergents. Patel was able to sell about 15-20 packets a day on his way to the office on bicycle. He started packing the formulation in a 10x10ft room in his house. household detergents in many parts of the country. mainly the MNCs . Nirma's network consisted of about 400 distributors and over 2 million retail outlets across the country. after his daughter Nirupama.623 ( USD in Millions ) Market Cap: 40684.7243933 ( Rs. Better Living" contributed a great deal to its success. at a time when HLL's Surf was priced at Rs 13. 31696.

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

however there are some who live in urban inner city areas in both the developed and the developing countries.the Indian middle class and elite. By ignoring the lowest rungs of society. HLL was in danger of being toppled from the leading position. 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 MNC’s. which consists of around 4 billion. the people at the bottom of the pyramid have usually been ignored. This group consists of the elite/ middle and upper-income people in our societies. Finally. the additional reason that MNC’s 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. In many cases the second and third tiers of the pyramid have also been focused on. India is the second most populous country in the world. The Top tier of the market consists of about 75-100 million people who earn more than $20. was equal to almost twice the population of the United States of America. The second and third tiers consist of the rising middle classes. Looking specifically at India it is easier to understand what working in rural markets entails. Tier 4. 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. Since Nirma was not in their market segment.500 and $20.000 a year . India’s rural market comprised 12% of the world’s population. HLL had disregarded a huge market segment that due to its sheer volume held great promise and potential. .500 a year. Nirma’s success in rural India dispelled the myth that rural consumers are poor and do not have the disposable income to buy consumer goods. Most of these people live in the developed world and a few in the developing world. refraining from entering the rural market due to their inability to be price competitive. 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 world’s population. In the early 1980’s the total population of India was around 750 million of which 70% lived in rural areas. Prahalad and Hart estimate that between 1. living mostly in developing countries and earning between $1. Thus India’s rural population.K. The general belief was that rural Indians were poor and the rural sector was too disorganized to bother with. especially as far as multinational corporations are concerned.750 million people live in Tier 2 & 3. we come to the bottom of the pyramid.500-1.000 a year. however. Most of the people in Tier 4 live in the developing world. which was comprised of 525 million people. Finally. The sheer size of the rural Indian market was the greatest attraction for entering it. due to high overhead costs most MNC’s are not able to price their goods in the manner that local companies can thus. C. With an estimated annual growth rate of 1. HLL did not consider them a threat. MNC’s have focused on the first tier as it allows for the highest margin of returns. people who earn less than $1. Typically. However.7%. Prahalad and Stuart Hart help us to understand this by looking at the market as a pyramid.

Nirma also ventured into manufacture of Fatty Acid. HLL would have to tackle the challenge of marketing a product in the absence of conventional marketing and advertising tools. The Company came out with its maiden public issue of Equity Shares in the year 1994. Glycerine and Single Super Phosphate). HLL’s decision to stay away from the rural markets was not limited to the physical challenges of the land.O. Nirma is one of biggest players of detergent market in India with a share of 38%. Nirma markets its products through its wholly owned subsidiary. Chemicals and Allied Products. Approximately 90% of India’s rural population lived in small way-out villages with populations of less than 2000. The nature of rural markets has always been very complex and rural India presented a number of unusual challenges for HLL. The associated companies including Nirma Detergents. Edible Salt. Detergents. HLL stayed away from the rural Indian market for the simple reason that it was physically very difficult to penetrate. In India the rural client group lived in approximately 570. Toilet Soaps. the company had closed its Bangladesh unit due to low sales volumes and entered into foods category with launch of Nirma Shudh Salt.P in India Despite the sheer size and potential volume of business in rural areas. Due to a lack of infrastructure.Challenges at B. 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. having major manufacturing plants for production of various products includes Soda Ash. During the year 2002.000 villages spread across the Indian countryside. Access to telephones and the Internet was unheard of. and few of these were all weather roads. 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. . only 45% of the villages could be reached by road. 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. and the second largest player in toilet soap market with a share of 20%.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. Glycerine. Linear Alkyl Benzene. Moreover. Industrial Salt and Others (Alfa Olefin Sulfonate. but also by the so-called ‘social and cultural’ challenges of the people. Sulfuric Acid. 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. Nirma Consumer Care was formulated as a wholly-owned subsidiary of the company by the company in the year of 1997 itself. Shiva Soaps and Detergents. In the same year of 2002. Nirma Consumer Care Limited. Nirma Ltd. It also has separate unit for packaging. Most villages neither had electricity nor running water. Nirma entered in toilet soap market in 1990. Soaps. Soaps. Nirma Soaps and Detergents and Nilnita Chemicals were merged with the company during the period of 1996-1997. During the same year. . Sulphuric Acid and Alfa Olefin Sulphonate (AOS). Banners and leaflets alone would not be effective since only 43% of rural Indians could read. they would have to be innovative. It was promoted by Karsanbhai Patel as his pet project. The Company is engaged in the consumer goods and industrial products sector.

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

Karsanbhai Khodidas Patel has been conferred with Padma Shri Award for the year 2010. Nirma Shudh salt is second largest salt brand in some parts of the India.91 million tonnes per annum at Tal Mahuva in Bhavnagar district. most of all HLL. It has also acquired land for a captive power plant to generate 50MW of electricity. It won Most Popular Brand in detergent powder–economy category at FMCG awards 2003. The government of Gujarat has sanctioned the supply of sweet water from Narmada pipeline for the cement project. Gujarat. . What next? Nirma is set to enter the cement manufacturing segment. “I found a massive market segment that was hungry for a good-quality product at an affordable price…so I decided to keep my margins very low.Milestones It is the largest player in detergent market in India with market share of 38% . 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? Karsanbhai’s response to this was that he saw an opportunity where others had not bothered to look. He said. A New Business model: The Nirma Way By 1984. and was happy if I could net between three and five percent… profits really came from the huge volumes we generated”. It was 9th largest FMCG brand of the country according to AC Neilsen Retail AuditBrand Equity in 2004. Awards • • • • Nirma was awarded Excellence award for Best Advertisement of the year at FMCG awards 2003. 1 brand in Asia leaving Surf far behind. Everybody was shocked. 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. Nirma occupied the position of No. It is planning to set up to set up a cement facility with a capacity of 1. It is second largest toilet soap marketer with market share of 20% in the country . Dr.

but the low-price strategy all by itself. had no perfume and was rough on the skin.5 to 3. Nirma was a low quality product. had insufficient active detergent. HLL marketed Surf. Nirma succeeded through its priceled strategy. At the same time. Karsanbhai’s product was in high demand. The company has to also make money/ profits out of it. the consumers did not mind. they captured a market that HLL ignored and even sneered at. Differentiating on the price front. While it may seem that Nirma was of inferior quality. until 1989.Marketing Strategy: Blue Ocean strategy Sabki Pasand Nirma…. with its Surf. Nirma Overtakes Surf: The War of the Bubbles Nirma provides a fine example for a price-led marketing strategy. Companies cannot survive only with a price-low strategy. Nirma entered the detergent market of India at a time when Hindusthan Lever Limited (HLL). this low-pricing strategy is not likely to last in the longterm. an FMCG giant. With their launch of cheap washing powder in 1980’s. At one-third the price. The rumour was that Nirma contained lower levels of active detergents and more fillers and soda ash. they also enlarged the pie itself. Nirma became a huge success and all this was a result of Karsanbhai Patel’s entrepreneurial skills. Unless the company has some significant cost advantages. as long as Nirma washed almost as well as Surf.. HLL was astounded by the growth of Nirma. But a difficult one!!! So how did Nirma make this a winning strategy for the long-term? . the differentiation theme was Surf washes whitest.6% of market share in 1987 Nirma had pushed HLL from the top. 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. taking to the differentiation route. It may work well as an entry-level strategy to grab your first chunk of consumers. Surf remained between 2. HLL then launched Project STING -.the Strategy to Inhibit Nirma Growth to get back its market share.6 times as expensive as Nirma. They grew large enough to actually steal market share from HLL's Surf. Going from 0% of the market share in 1976 to 61. Despite all these factors Nirma had outperformed Surf in the market. Pricing attractively coupled with earning great profits out of it is a long-lasting strategy. isn’t a long lasting one. had established a near monopoly in the business. housewives of rural India were not objecting. According to HLL. HLL commented that Nirma did not contain any whitening ingredient. it may/may not be successful for the long-term. They thus. to attract a large number of users may work well as an entry-level strategy. not only captured a bigger portion of the pie.

Only a company with the lowest cost can compete on price and win. it attracts a large number of customers which leads to increased sales volumes. It has decided to enter the low priced segment.50 per kg. Being the lowest-cost producer (having significant cost advantages). 11 per kg. But this was not enough to check the growth of Nirma had chosen. when coupled with large volumes helps a company grow its sales & profits. Nirma priced its detergent at Rs. placing orders well in advance (by forecasting demand). Nirma became a Rs.000 crore business. 2) Working on a cost-leadership strategy i.e. relying heavily on the differentiation theme. Nirma kept growing in both volume and market share. 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. procuring raw material. For this the company needs to gear up everything for the large volumes i. low selling & marketing expenses etc b) Having the power to negotiate lower costs with its suppliers. HLL had to defend Surf with all its might. even when it prices its products competitively. In just about 10 years. 1. a differentiation-led strategy. Surf was sold at a price of over Rs. 32 per kg. It was this cost leadership built early on that enabled Nirma to follow the price-based marketing strategy. HLL had been operating as a matter of policy. Wheel was priced at Rs. This power usually comes from long-term relations with suppliers. so low that nobody can match? Very obviously. manufacturing. the company stepped up its promotion of Surf. process and raw materials. selling etc in such a manner that it gives them a cost advantage. Wheel which is positioned against Nirma. 10. 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. c) If the company’s 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. low manufacturing expenses. the lowest-cost producer: This can be achieved by a) Working on low-costs for everything. highlighting the distinctive merits of Surf as a detergent and marketing it as premium product. procurement. . HLL was successful for two decades. It relied on low cost technology. and it had to change its strategies. With a big chunk of the Indian consumers being highly price sensitive.e.

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

All leading national players in the industry – HLL. P&G had changed its strategy of being value focused -.25-2% of its turnover on advertising as compared to the normal 6-10%. which has now eased off. and then create an enduring ad campaign. 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. The entry of P&G onto the scene further intensified the competition. Price Wars : HeLL breaks loose When Nirma. creating a new market segment . as compared to other FMCG companies. HLL launched various counter measures. Nirma spent only 1. HLL has taken retaliatory steps to keep P&G in check and retain its leadership position. HUL responded by slashing the prices of their premium brands Surf and Rin. This move is likely to bring about a dramatic change in the consumer profile of each segment. Initially. with its simple message and catchy jingle. By the early 80’s Nirma became synonymous with good quality and lowprice. which boosted the sales of these detergents by almost 100%. P&G had slashed prices of sachets of Ariel and Tide from Rs 3 and Rs 2 to Rs 1.Nirma Limited markets its products through its fully owned subsidiary Nirma Consumer Care Limited (NCCL). while popular brands may face volume pressure as customer upgrade to more affordable mid-priced brands. The distribution strength of Nirma is based on mutually rewarding and satisfying relationship. Tide was available at Rs 23 for a 500 gm pack. The impact would be felt by brands in all segments as mid-priced users may upgrade to premium brands.The market penetration in the detergent market is 88% for the whole of India which leaves very little scope for expansion. Nirma. 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 betting big on volumes. 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. a small insignificant player. the advertising spend of the company was very low. There has been a price war between the two majors in the detergent segment for years. which was incepted in 1985. receive feedback. Before that also. down from Rs 43 earlier. It perhaps was the most famous audio-visual of . The kind of impact that Nirma’s simple “Dancing Girl” advertisement managed to have on prospective buyers was phenomenal.the compacts. by the late 70’s as televisions slowly started to spread into rural India. but with more players vying for this share the war is set to heat up. began challenging Surf's dominance in the detergent market. Nirma always preferred to place the product on the shelves first. While the price of Ariel had been slashed from Rs 70 to Rs 50 for a 500 gm pack.5 and Re 1. NCCL in turn resells these products in the market under the umbrella brands NIRMA and NIMA along with extensions. so did the Nirma ad campaign.

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

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

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

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

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

04 crore in the year ended March 2011 as against Rs. the stock market has been reluctant in according Nirma a status as strong as Hindustan Lever.99 crore during the previous quarter ended March 2010. For the audited full year. 773.13% to Rs. The robust network ensures the availability of various products at different retail outlets across the nation. The network is well equipped to meet the demands of the loyal consumers of the Company across the country. 840. build up the retailer base by providing various benefits and incentives.77% to Rs. Britannia or other MNCs. The distribution channels have played a significant role in making Nirma a household name. 25.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. . Procter and Gamble.94 crore during the previous year ended March 2010. 23.74 crore in the quarter ended March 2011 as against net profit of Rs. The distribution channel is geared up to enhance trade relations.65 crore in the year ended March 2011 as against Rs.88% to Rs. 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. Despite a strong presence in the detergents market and a significant share of the toilet soap segment. Sales rose 4. 3246. honey! Nirma reported net loss of Rs.09 crore during the previous quarter ended March 2010. schemes and activities concentrated towards business development Levels of Channel Distribution Company Manufacturing Unit Consolidator Wholesaler Semi-Wholesaler Retailer Consumer Financial Planning: It’s all about the money. organize and implement different activities to generate sales and manage numerous other programmes. net profit declined 68.95 crore during the previous year ended March 2010. Sales rose 8. 3117. 237.91 crore in the quarter ended March 2011 as against Rs. The Company has been successful in establishing an extremely good urban as well as rural presence through the two distribution channels. 74.

today employs around 14 thousand people and has a turnover of more than $ 500 million. In 2004 Nirma’s annual sales were as high as 800000 tonnes.Figure 1: Loss of Rs. The reasons for the indifferent attitude are not far to seek. As far as Corporate social responsibility (CSR) is concerned.Nirma Foundation and Chanasma Ruppur Gram Vikas Trust as a part of their effort as a socially responsible corporate citizen. the stock market appears to be hardly impressed with Nirma's performance. 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. .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. Nirma has also set up Nirma labs . However. According to Forbes in 2010 Karsanbhai Patel’s net worth was $ 575 million. Outcomes The company that was started in 1969 with just one man who used to deliver his product from one house to the other. which prepares aspiring entrepreneurs to effectively face the different business challenges. P&G and Henkel SPIC. Nirma also runs Nirma Memorial Trust . 23. 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.

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

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

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