Pramita Athikaray –

Neelam Rathode –

Vibha Sahu –

B.Chaitanya Kumar -

The Nirma Story

… …a a dynamic phenomenon,dynamic phenomenon,

… …a philosophy,a philosophy,

… …a revolution…a revolution… that changed our lives!that changed our lives!

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A Gujarati entrepreneur, Dr. Karsanbhai Patel, set up his first detergent-making unit in the backyard of his home in Ahmedabad - measuring all of 100 square feet.

With bare hands and a bucket, he would prepare the dry mix detergent powder that he had invented, pack them in polythene bags and then set off on his bicycle to sell the packets door to door.

Every packet of Nirma that Karsanbhai Patel sold to his consumers came with a money back guarantee.

The cost-conscious approach of the initial years was to evolve into a strategic perspective.

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Nirma was setup with Simple Yet Superior Marketing Strategy Product Positioning: Nirma found its place

between the expensive detergents and inferior washing soap slabs. The Nirma brand was quickly recognized in Gujarat and neighboring parts of Maharashtra and the rest is history.

Pricing: Nirma transformed the face of Indian detergent market by staging the strength of low-cost detergent powder segment. The new yellow powder was priced at Rs. 3 per kg, at a time when HLL's Surf was priced at Rs 13.

Distribution: Nirma targeted non-users of Surf thus avoided the attention of HLL and later grew rapidly and was unstoppable once it was in the right mode.

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Nirma vs. Hindustan Lever Nirma took on the might of giant multinationals and

wrote a new chapter in the Indian corporate history

In the early 1970s,Hindustan Lever Limited (HLL) reacted in a way typical of many multinational companies. Senior executives were dismissive : "That is not our market", "We need not be concerned."

In the 1980s Nirma catapulted Surf, and occupied the top slot in the detergent products segment-a slot it has made its own

In fact, it was Nirma that inspired the birth of Surf’s Lalitaji.

HHL soon recognized the disruptive threat posed by Nirma and introduce substitutes such as Wheel to stem the tide of Nirma

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ROAD TO SUCCESS…..1985

2nd product from Nirma – Nirma detergent cake. Huge success.

Launched Nirma Super Detergent (superior spray-dried blue detergent powder.)

Nirma beauty soap launched under the Umbrella brand name of Nirma.

Umbrella brand successfully adopted.© A

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Nima….1997 & shudh….2000 Nima launched to counter breeze. Again a huge success in 18 months.

Both Nirma and Nima captured almost all the increamental growth of last 12 yrs in the soap market.

Both brands managed to hold a competitive market share.

Millennium year – Nirma shudh edible salt launched with world class Akzo Nobel Technology.

Only the second vaccum salt in the country.© ALI

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It became necessary for Nirma to enter the premium segment.

Nirma is considered to be a cheap brand.

Broaden its product portfolio.

To lower its dependency on the increasing competitive and stagnating soaps and detergents market.

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Cost competitiveness HLL’s surf was highly priced in India during 1970’s Yellow powder was mixed manually in workshops to

get excise concessions.Managed with a workforce of 10,000 and 200

managers thereby trying to break the cost barrier. Supply chain management

Managed to source packages from only 10 vendors but incurred high costs and delay in deliveries.

Adopted centralized packaging : Able to cut its inventory costs by 40 %.

Adopted flat distribution system : Nirma was directly connected to distributors and no agents in between.

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Distribution

Principal Channel - Lowest cost system in India - Speed in Distribution - Flexibility

Nirma(8 Locations)

Distributors(400

Exclusive)

Retailers(2 Million)

Customers(400 Million)

Whole sellers

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Backward Integration After the withdrawal of the excise commission in 1982

Patel got into backward integration. Started manufacturing Sulphuric acid, Alfa olefin

Sulphonate,Fatty acid in 1983. 1990 Glycerin \ 1994 Packaging \ 1995 Single super

phosphate \ 1997 N Paraffin soda ash ,Industrial salt, Edible salt, Captive power point.

Sustainable advantage Low cost labor Superior processesMindset of cost-conciousness in India.

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The sheer size of the operations makes it difficult to maintain the highly centralized style of running that has always been characteristic of Nirma.

Nirma also faces intense competition from the small sectors, which was its initial launch-pad.

Since transportation costs are a very crucial part of costing many manufacturers are locating their factories as close as possible to their eventual sales points so as to save on transport costs.

Nirma could well lose out soon on its best Unique Selling Proposition-price.

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Nirma followed its original marketing and pricing strategies in both economy and premium segment.

Launched product categories like premium detergent and premium toilet soaps in mid nineties and in 2000 entered hair market like nirma shikakai, nirma beauty shampoo.

Challenged the biggest competitor, HLL by launching nirma bath against lifebouy, nirma rose against breeze and nirma lime against lime.

Manufactured soaps with right scents keeping prices low.

Geographical diversity – Pink soaps in north, Green and sandal soaps in south.

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Nirma believes in advertising only after they have launched a product in place.

Nirma's advertising has always focused on the value-for-money angle.

In 1982 we witnessed the birth of the first film for the brand, with the effervescent jingle. Its simple and catchy – “Dudh si safedi Nirma se aye, rangeen kapda bhi khil khil jaye”

Nirma spent only 1.25 - 2 % of its turnover on advertising as of 6 – 10 % likewise other FMCG companies.© A

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In 1989 the second commercial featured the superstar of those days, Sangeeta Bijlani, along with models such as Shikha Swaroop and Anuradha Patel. Used starlets like, Sonali Bendre and Riya Sen for their beauty soaps

In 2005 a little change from its predecessors – this was the food throwing ad (Hema, Rekha, Jaya, Sushma). It lent names and profiles – to Nirma housewives

The jingle being a part of Nirma’s communication,was rarely tweaked with the swirl of Nirma girl in a frock on the pack shot.

Other constants in a Nirma film included twirl of saris by models in outdoor locations. © A

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In 2009 Nirma wakes up and decides to undergo a personality transplant. A whopping Rs 1.5 crore is spent on that thought.

The result a 'underwater' commercial, which showed dancers moving with flowing fabric - a metaphor for clothes being washed in a bucket.

It did not use the iconic Nirma jingle.

Now, Nirma is back to talking about the dirt tackling properties of the detergent, as well as use the legendary 'Washing powder Nirma' jingle.

In Soap adds, it is still using a relatively unknown stars , Hansika Motwani being the latest addition.

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Gross sales over 2400 crores. ROCE of 24 % and RONW 22 %. 8 manufacturing locations. Amongst top 10 Indian Brands. Nation wide Distribution reach. - 2500 Distributors - 2000000 Retailers - 40 Depots\ Strong human resource base consisting of 15000 employees and 500 professionals.

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Detergents

Nirma Washing Powder

Nirma Detergent Cake Super Nirma Washing Powder Super Nirma Detergent Cake Nirma Popular Detergent Powder Nirma Popular Detergent Cake© A

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Soaps Nirma Beauty Soap Nirma Bath Soap Nirma Lime Fresh Soap Nima Rose Nima Sandal

Edible salt Nirma Shudh Iodized Salt

Scouring products Nirma clean dish wash bar Nirma bartan bar

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Challenging established multinationals needs extreme courage and to win in the long run needs marketing foresight.

We believe, Nirma is at a crossroad, and so need to reinvent themselves, because the market itself has become much more evolved.

What Nirma now needs to do is innovate from the product level and go for a more radical change.

A brand has to constantly refresh its communication.

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© ALI