INDEX

NO.

CONTENTS PAGE NO.

01 RESEARCH METHODOLOGY

03

02 INTRODUCTION TO THE SALT INDUSTRY

08

03 EDIBLE IODISED SALT

15

04 PEST ANALYSIS OF INDUSTRY

19

05 FIVE FORCES ANALYSIS OF INDUSTRY

22

06 COMPETITIVE ANALYSIS

25

07 PROMOTIONAL CAMPAIGN IN EDIBLE SALT INDUSTRY

29

08 NIRMA INDUSTRIES LIMITED

31

09 SWOT ANALYSIS OF NIRMA SHUDH SALT

41

10 DATTA ANALYSIS

43

11 HYPOTHESIS

67

12 FINDINGS

73

13 SUGGESTIONS & RECOMMONDATIONS

77

BIBLIOGRAPHY

X

APPENDIX

Y

LIST OF THE GRAPHS A

2

LIST OF THE GRAPHS

NO.

TITLE PAGE NO.

01 USER OF THE IODISED SALT

44

02 USERS IN AHMEDABAD

45

03 DIFFERENT BRANDS OF SALT TO AREA 47

04 RANKING PREFERENCE 48

05 AVERAGE MEAN

49

06 USERS OF SAME SALT BRAND 50

07 FREQUENCY OF PURCHASE 51

08 NUMBER OF 1 KG PACKETS REQUIRED FOR 1 MONTH 52

09 PURCHASE DECISION MAKER 54

10 FROM WHERE YOU PURCHASE SALT 55

11 USER OF NIRMA SHUDH SALT 56

12 RANKING PREFERENCE FOR NIRMA SHUDH SALT 57

13 PRICE OF NIRM SHUDH SALT 58

14 INFLUENCER OF PURCHASING NIRMA SHUDH SALT 59

15 MEDIA USED 60

16 HAD RESPONDENTS SEEN TELEVISION ADVERTISEMENT? 61

17 AVAILABILITY DIFFICULTY 63

18 19 20 21

DO YOU LIKE PACKAGING EDUCATION LEVEL INCOME LEVEL PROFESSIONS

65

66

67

68

A

3

RESEARCH METHODOLOGY

Research Methodology is a systematic design, collection of data, reporting of data and findings relevant

to specific marketing situation that is faced by company with the paradigm in the market shifting, from

the product to consumer, their needs and preferences have become essential to the considered by the

producer today in the world of cut throat competition to be ahead in the race and to lead is required to

reach consumer first.

The NIRMA SHUDH SALT, which has newly relaunched in India. The sale of Nirma Shudh Salt is not

increasing rapidly that is the problem. Therefore, research problem is to identify the consumer preference

of edible (iodized) salt as well as the satisfaction level of consumer regarding the Nirma Shudh Salt and

what are the problems they are facing regarding the product.

4

OBJECTIVE OF THE STUDY

To study the Consumer Preference for Edible Salt

To study the Consumer Preference for Nirma Shudh Salt

To study the awareness about Nirma Shudh Salt

To know the brand awareness of Edible salt in different area of Ahmedabad and to illicit the

consumer opinion about price, quality, reasons for choice, brand satisfaction etc.

To study the purchasing pattern of Edible Salt.

To know the criteria preferred by the consumer at the time of purchase of edible salt

5

RESEARCH DESIGN

A research design is the specification of methods that producer wants to acquire from the market. It is the

overall operational patterned framework of the project that stipulates what information is to be collected

and from which sources and from which producer of this competitive environment.

Generally, there are basic three types of research design, Exploratory, descriptive and Casual research.

Here Researcher has taken Descriptive Research Design and the reason behind it is as follows: The

Descriptive Research Design is used when the researcher is interested in knowing the characteristics of

certain group. Here Researcher is interested in knowing the proportion of people in a given population

have behaved in a particular manner making projection of things or determines the relationship between

two or more variables. The objective of the study will answer who, what, when, where, and how of the

subject under investigation for consumers as well as retailers. It is therefore necessary that Researcher

will give sufficient thought for framing research questions and deciding the type of data to be collected.

DATA COLLECTION METHOD

1. PRIMARY DATA:

Using two methods, the data has been collected:

Observation:

The purpose of observation was to have a look on the actual condition of which brand of salt are used by

consumer. With the help of Retailers, Researcher have seen the consumer’s observation as actually, how

much and which brand of salt they are using at present? What is the purchasing pattern of consumer?

Questionnaire method:

The questionnaire is divided into two methods that is Structured and Non-structured Questionnaire

Method. Researcher have used the Structured-Non-Disguised Questionnaire that is the part of a

Structured Questionnaire. In that Method, the listing of question is a pre-arranged order and object

inquiry is revealed to the respondent. Researcher have done the pilot survey of 20 customers for checking

out validity of our questionnaire and then Researcher have finalized our questionnaire for the survey

purpose.

6

2. SECONDARY DATA:

Someone already collects these data and it is available for my present study. And the sources of the data

are as follows:

Internal sources:

Annual Report of NIRMA.

External sources:

• Magazine

• Newspaper

• Library books

• Web Sites

• Population List

SAMPLING PROCESS

Defining the population:

It is the aggregate of all the elements defined prior to the selection of the sample. It is necessary to define

population in terms of Element, Sampling extent and time. I have conducted a survey on the consumer to

know the preference and satisfaction level for Edible Salt users (especially Nirma Shudh salt) with

special reference to different areas of Ahmedabad. These specifications are as follows:

• Element: Buyer of Edible Salt.

• Sampling Size: 250 House Hold

• Sampling unit: Household respondents

• Sampling method: Stratified Convenient Sampling

• Sample size decision:

For using the stratified sampling method, I have divided the city according to the Zone wise. And

the Ahmedabad city is covered with many areas which are representative of the Ahmedabad as a

whole. I have chosen areas like Maninagar, Satellite, Vadaj, Saraspur, Meghaninagar, Bapunagar

and Naroda.

7

Hypothesis: A chi- square test for independence has been conducted for knowing the relation between the area and the

preference towards salts.

Ho: Preference towards salts and area are independent of each other.

H1: Preference towards salts and area are dependent of each other.

LIMITATIONS OF THE STUDY

The limitations of the study carried out are as follow:

This study is limited to different areas of Ahmedabad

I have considered the survey with only 250 households for knowing about consumer preference

about the Edible Salt in Ahmedabad.

The accuracy of the project and conclusion is totally dependent on the data collected and

analyzed.

The sample size is too small to predict the future growth of the edible salt industry.

8

Salt Industry Introduction

India is the third largest salt producing country in the world (after the US and China) with an average

annual production of about 148 lakh tones. In a very short period of time sufficiency was achieved (in

1953) and made a dent the export market. Since then, the country has never resorted to imports. Exports

touched an all time high of 1.6 million in the year 2001.

The per-capita consumption of salt in the country is estimated at about 12 kg, which includes edible as

well as industrial salt. The current annual requirement of salt in the country is estimated to be 60 lakhs

tones for industrial use. Caustic soda, soda ash, chlorine etc., are the major salt-based industries.

Besides about 15 lakhs tones of salt is exported every year. Sea salt constitutes about 70% of the total salt

production in the country. Salt manufacturing activities are carried out in the coastal states of Gujarat,

Tamil Nadu, Andhra Pradesh, Maharashtra, Karnataka, Orissa, West Bengal Goa and hinter land State of

Rajasthan. Among these States only Gujarat, Tamil Nadu and Rajasthan produces salt surplus to their

requirement. These three states produce about 70%, 15% and 12% respectively of the total salt produced

in the country and cater to the requirement of all the salt deficit and non-salt producing states.

Private sector plays a dominant role contributing over 95% of the salt production, while the public sector

contributes about 2-3%. The co-operative sector contributes about 8% whereas the small-scale sector

(less than 10 acres) accounts for nearly 40% of the total salt production in the country.

Salt Production

There are about 10107 salt works, mostly in small sector engaged in the production of salt. The total area

under salt production is about 5.0 lakhs acres. The salt manufacturing activities provide direct

employment to about one-lakh presons per day.

Distribution of Salt

Railways play an important role in transporting salt from three surplus states to the entire length and

breadth of the country. On an average, 55% of edible salt is transported by rail from production centers.

The remaining quantity moves by road and waterway.

9

Iodized Salt

With a vies to ensure universal access of iodised salt for the prevention and control of goiter and other

iodine deficiency disorders in the country, Salt Commissioner's Office has been identified as the nodal

agency for creation of adequate salt iodisation capacity, its distribution and quality monitoring at

production centers, under NIDDCP. Salt Department has granted permission to more than 878 salt

iodisatios units with an annual

installed capacity of 112 lakh tones so far.

Exports

Export of common salt and iodised salt is permitted under Open General License (O.G.L.). Salt is

exported manly to Japan, Philippines, Indonesia, Malaysia, Nepal, and Bhutan etc. India has, for the fist

time, exported 32,500 tonnes of common salt to the US during December 2002, creating a history of

sorts.

Liberalizatin and Simplification of Procedure

Following amendments to Central Excise and Salt Act, 1944 in 1996, de-licensing the salt industry and

salt Cess Rules, 1964 in 2001 and introducing self-removal procedure (SRP) instead of permit system for

payment of cess and removal of salt from salt factories, several registers have been discontinued or

reorganised.

When the Father of the Nation, Mahatma Gandhi strode purposefully alongside thousands across the

length of Gujarat in his historic Dandi March in 1930 to release the domestic salt industry from the

shackles of the Britishers, little did he anticipate that half a century later the same salt industry -- at that

time a mere 20 lakh tones of salt was being produced and salt was being imported to meet the domestic

demands -- would end up as a Rs 3,600 crore industry accounting for the world's third largest production,

averaging a whopping 14 million tones annually. Salt production encompasses an estimated area of over

4.8 lakh acres spanning the states of Gujarat, Rajasthan, Tamil Nadu and to a lesser extent, Andhra

Pradesh, Tamil Nadu, Orissa and West Bengal. The industry directly employs over one lakh salt laborers.

Salt is an essential commodity with inelastic demand. Planning of production targets, distribution of salt

and price surveillance, promotion of technological development, maintenance of standards, improvement

of quality of salt and promotion of exports are done by the office of the Salt Commissioner, Jaipur, India.

Per capita consumption of salt in the country is estimated at about 12 kg. Per head per annum, which

includes edible and industrial salt. Current annual requirement of salt in the country is estimated at 60

lakh tones for edible purposes (including animal consumption) and 60 lakh tones for industrial use.

10

Caustic Soda, Soda Ash, Chlorine, etc. are the major salt-based industries. The country is not only self

reliant in salt production but also exports about 10 lakh tones of salt annually over the past few years. Salt

is manufactured mainly by solar evaporation of seawater, sub-soil and lake brine. Sea salt constitutes

about 70% of the total salt production in the country. Salt manufacturing activity is confined mainly to

the coastal States of Gujarat, Tamilnadu, Maharashtra, Karnataka, Goa, Andhra Pradesh, Orissa, West

Bengal and in the Hinterland State of Rajasthan. Gujarat, Tamilnadu and Rajasthan are surplus in salt

production, producing about 72%, 14% and 11% respectively of the total salt production of the country

and cater to the requirements of deficient and non-salt producing States.

Salt works having an area of more than 10 Acres (including salt works set up by the co-operative

societies) are covered under the provisions of the Salt Cess Act, 1953. Salt works having an area up to 10

Acres set up by individuals or groups of individuals are exempted from the provisions of the Act. The

private sector plays a dominant role in the salt industry, contributing over 95% of the total salt

production, while the public sector contributes about 3-4%. The small sector (less than 10 acres) accounts

for about 30% of the total salt production in the country. There are also units in the co-operative sector.

The salt manufacturing season begins with the closure of monsoons i.e., by the 15th October and lasts up

to June next year coinciding with the onset of monsoon again.

COMMON SALT – PROPERTIES AND USES

Sodium chloride (Nacl) now called common salt is an example of the simplest type of chemical salt. a

molecule of common salt contains an atom of chlorine combined with 23 parts by weight of sodium to

form 58.5 parts of common salt., Rock salt is rarely found in an absolutely pure anhydrous state in which

it is colourless and perfectly transparent. In most rock salt, mines such specimens are considered

curiosities. In Wieliczka mine in Poland and in Khewra mine in the Punjab large masses of salt

containing over 99 percent Nacl are met with. In the Punjab mines we meet with salt of different colours

such as white, pink, darkish or red. The colour disappears when salt is crushed to powder. The colour of

seawater is affected by the percentage of salt in it; as the quantity of salt decreases, the colour changes

from blue to green. Salt is met with in any colours; white, pink, red, brown, greenish and grey. The red or

green colour is attributed to the presence of infusoria.

Salt is highly soluble in water, 100 parts of which dissolve 37 parts of salt. The specific gravity of such

solution 1:2, the specific gravity of salt crystals is 2.16. The smallest quantity perceptible to taste is 68

grains of salt dissolved in a gallon of water. Pure Sodium Chloride is not deliquescent. It, however,

absorbs moisture owing to the presence of magnesium chloride. Sodium Chloride melts at very high

11

temperature, at still higher temperatures it evaporates and at white heat it volatilizes forming thick clouds.

It does not diffuse much, even when masses of varying densities are super-imposed on one another.

Salt is fairly hard. there is no standard unit fixed for hardness. Geologists, however, compare the hardness

of minerals by a comparative table (Moh’s table of hardness) according to which the hardness of talc is

considered as one and that of diamond ten. According to this standard the hardness of salt is 2.5. Its

cohesion or power of supporting pressure is twice as great as that of bricks. Common salt is a crystalline

substance: crystals generally form cubes and sometimes they form octahedrons. The form of crystals

depends on temperature, state of rest or motion, length of time etc. Salt has a perfect cleavage. It splits up

readily in to planes parallel to the faces of the cubes of which it is composed.

Salt has acoustic properties as well that is to say; it is a good medium for the transmission of sound.

Workmen in a salt mine are able to signal by blows on the face of the rock. Salt possesses in a high

degree the power of staying decomposition in dead organisms and is the commonest of all preservatives.

Owing to this property it is an absolute necessity to the life of man and the higher animals. Salt water

trickling through the roof of a working also forms stalactites and stalagmites just as time-stone forms

them. In Khewra mine we meet with long hollow tubes of salt formed by the brine trickling drop by drop

through the roof.

Rock salt has many minerals associates with it: for instance, gypsum, sodium sulphate, magnesium

sulphate and magnesium chloride. In the Khewra mine, salt is found mixed with variously cioloured

clays, white pink, red, variegated gypsum beds, limestone, and magnesium sulphate. Bad salt is

associated with magnesium sulphate and good salt with calcium chloride. A cube foot of pure rock salt

weight about 25 to 27 kgs.

Common salt is a necessity of life. It imparts an agreeable flavour and improves the taste of food and is

used as a condiment. it may be interesting to know how exactly salt consumed in its natural or artificial

form functions in the human body. It is Iodised by infusion of minute doses of potassium iodide about

.02% as prophylaxis for Goitre Similarly, it is medicated with phosphates or other ingredients to regulate

the deficiencies in human system. Salt, in short, is a preserver health. Lord Lawrence, in his evidence

before the Select Committee on East India Finance in 1873, attributed the prevalence of murrain in the

Indian cattle to the want of salt in their food. It was used as chemical manure long before the Christian

era and its value was recognized throughout Europe. the ancient Hebrews applied it as a manure over

2,000 years ago in Palestine and so did that eminently agricultural people in Chinese and do still to this

day. The old Romans too used it as manure. In India its use in agriculture is rather looked on with

12

disfavour. Mr. Arthur Young, an outstanding figure in the history of English and even European

agricultural renaissance, considered salt of great value as fertilizer.

The use of salt in modern industries is equally or perhaps more important. A number of arts and

manufacturers of modern civilizations owe their existences to salt. In short, salt is indispensable to

industrial advance.

PRODUCTION

Scanty rains and draught like conditions in major salt producing States of Gujarat and Rajasthan resulted

in prolonged salt manufacturing season and thereby creating conditions for increases in salt production

after 2000.

With the increasing thrust on ionization of salt and to meet the quality needs of the industrial sector,

emphasis is being laid on the manufacture of quality salt. Up gradation in quality of the raw salt

manufactured from the solar salt works to cater the above requirement is undertaken in salt washeries and

refineries. Salt Department has registered 39 salt washeries/refineries so far, of which, 31 units have

commenced commercial production.

The country is also focusing on the export of the salt as the production is increased beyond the

consumption level of the Indian market.

DISTRIBUTION

Railways play an important role in the movement of salt from the three surplus salt producing states to

the far-flung areas of the country. About 66% salt dispatches from the production sources are by rail the

remaining by road and waterways. The Zonal Scheme formulated by the Salt Department in consultation

with the Railways and the state Governments ensures adequate supply to the consuming areas. During the

year 2001-02, no scarcity or abnormal price rise was reported in any part of the country. The companies,

which are prevailing in the edible salt market, have the advantage of effective distribution network

because it is one of the factors of making a success in the market.

LIBERALISATION & SIMPLIFICATION OF PROCEDURE

Cess on Salt is levied as per provisions of the Salt Cess Act, 1953, and the Rules made there under. With

a view to further liberalize and facilitate realization of salt cess from the salt manufacturers (erstwhile

licensees), the Government has introduced Self Removal Procedure (SRP) in place of consignment-wise

13

permits system for removal of salt from the Salt Factories vide Notification dated 4th September, 2001.

The concessions provided in the rate of Cess in the Salt Cess Rules, 1964 and subsequent amendment

made vide Ministry of Industry’s Notification dated 09.09.1981 still continue to be in force.

EXPORTS

Despite being among the largest producers of salt in the world, India has not been able to make a dent in

the international markets which is evident from the low volumes; our best export performance thus far

has been a miniscule 6.66 lakh tones in 1990.

The Indian salt industry has been singularly unsuccessful on the export front, despite India's salt probably

being the cheapest in FOB terms compared to other salt exporting countries. This is mainly due to the

high trade logistic cost which leads to interminable delays in the turnaround of vessels, which pushes up

the CIF value of Indian salt to unacceptably high levels. The inability of India to have a global presence

is also one of the main reasons for the prevailing glut conditions in the Indian market. Since the scope of

increasing demand in the domestic market is fairly limited, the only way to come out of the glut crisis is

by emphasizing on exports in a big way. Alarm bells are already ringing in the industry over the record

14.5 lakh tone salt production in 1998-99, which is expected to burgeon to around 16-18 million tones in

the current year.

While a mere two per cent of the country's salt is manufactured by the 11 public sector and joint sector

undertakings -- Hindustan Salt Works (Kharaghoda and Mandi), Experimental Salt Farm (Bhavnagar),

the Tamil Nadu Salt Corporation and Sambhar Salts-- a whopping 98 per cent is in the hands of the

private, co-operative and unorganized sector. But here again, the big corporate have a low presence with

the lion's share with the small and medium units.

According to the salt department statistics, in 1998-99 there were 2,752 recognized salt units as against

an estimated 6,408 unrecognized units in the country. The recognized salt manufacturers allege that these

unrecognized units not only supply sub-standard salt in the market but are also causing major revenue

losses to the government by evading cess and royalty payments.

India produces more salt than its domestic requirements. These apart, the industry is also finding it

difficult to keep its head above water on account of the drastic slump in demand for industrial salt by the

recession-hit domestic soda ash and caustic soda industries which are the main salt consumers.

Export of common salt and iodized salt is permitted under Open General License (O.G.L.) Salt is

exported mainly to Japan, Philippines, Indonesia, Malaysia, Nepal and Bhutan, etc.

14

Every day, each of the earth's 5.9 billion inhabitants uses salt. Annual salt production has increased over

the past century from 10 million tons to over 200 million tons today. Nearly 100 nations have salt

producing facilities ranging from primitive solar evaporation to advanced, multi-stage evaporation in salt

refineries.

Humans need salt to live. Prehistoric man obtained salt from the meat of hunted animals. When man

developed agriculture, salt was added to supplement the vegetable and cereal diet and the quest for salt

became a primary motivation in history. In the mid-1800s, salt's value as an important raw material for

the chemical industry was established when the Solvay process in Belgium converted salt to synthetic

soda ash. Salt is, today, the largest mineral feedstock consumed by the world chemical industry.

IODIZED SALT

With a view to ensuring Universal Access of iodized salt to eliminate goiter and other Iodine Deficiency

Disorders in the Country, the Salt Commissioner’s Office has been declared as the Nodal Agency for the

creation of adequate capacity for the production, distribution and quality monitoring of iodized salt at the

production centers under the National Iodine Deficiency Control Programme (NIDDCP). The Salt

Department has registered more than 940 units with annual installed capacity of 147 lakh tones.

15

EDIBLE IODIZED SALT

INTRODUCTION

The scenario on the edible salt front is not so grim thanks to India's burgeoning population. To some

extent, decrease in demand for industrial salt is being nullified by the increase in demand for edible salt.

An individual's annual requirement for salt has been pegged at 6 kg. Taking the country's present

population at 100 crores, the requirement for edible salt would be 60 lakh tones per annum. Despite a

burgeoning population and the corresponding increase in the demand for edible salt, it is clear that on the

industrial salt front, the industry has heavy odds stacked against it. As an industry observer sums up,”

What we need is not only large markets within the country only but outside too. And for this, the country

requires standardization of quality and concentration of supplies instead of the present scattered quantities

available with the small manufacturers. And an influx of technology as well. The sooner this is done, the

better it is for the health of the industry.

Competition is hotting up in the branded salt market with Tata Salt, the blockbuster brand of Tata

Chemicals Ltd, emerging as the market leader. Tata Salt has a market share of around 37 per cent while

its closest competitor, Annapurna from Hindustan Lever Ltd, is breathing down its neck with a market

share of around 35 per cent, a recent ORG-MARG retail audit revealed. The ORG-MARG retail audit

showed that the 15 lakh tones domestic branded salt market would witness stiff competition among

popular brands such as Dandi, Surya and Nature Fresh as they try to grab a comfortable share, each with

intensive marketing strategies and advertisement campaigns. The ORG-MARG figures revealed that

during the financial year ended March 31, 2002, on an average basis, Tata Salt grabbed a market share of

36.58 per cent, while Annapurna’s market share touched 34.46 per cent. DCW Home Products Ltd’s

Captain Cook (now with HLL) had 7.78 per cent market share and other brands such as Dandi, Nirma

Shudh and Natural Fresh had market shares of 0.97 per cent, 1.37 per cent and 0.14 per cent respectively.

In March 2002, the market share of Tata Salt touched 39 per cent, while Annapurna’s market share

during the same period was around 30 per cent. According to analysts tracking the industry, the recent

entrant to the branded salt category is Dandi salt. The brand is being advertised heavily on the regional

channels and it has managed to gain around 0.97 share of the branded salt market. However, they said

that the unbranded sector continues to control a sizeable share of the overall salt market in the country.

Meanwhile, sources said that Tata Chemicals has already initiated new efforts to involve and engage its

business associates in marketing and strategy processes to enhance the brand muscle of Tata Salt.

While Captain Cook is positioned on the basis of its unique selling point, the free-flowing nature of its

salt, Tata Salt is positioned on the purity platform and Annapurna is positioned on the health benefit

impact of the iodine content in the salt." Tata Salt, the first branded salt in the country, was launched in

16

1983, DCW launched its brand in 1991 and Hindustan Lever’s Annapurna was launched in 1996. Other

FMCG companies such as Dabur India and Marico Industries have also got a presence in the salt market,

though insignificant, with their brands — Nutra salt, a low sodium salt and Saffola Salt, which is a

mineral enriched low sodium salt respectively. Both the above brands are positioned on the health

platform and are priced at a significant premium to the normal salt brands.

EDIBLE SALT IS BETTER IN COMMODITY MARKET

The trend of commodity-to-brand is yet to gain pace. While performance of staple foods has been patchy

and has fallen short of expectations, one market that's remained on top of the heap and growing faster is

branded salt. Well, if there's one commoditised brand that has been outperforming others such as atta,

sugar, rice and staples, it is good old salt. Salt, sugar, atta - all are commodities but at very different

stages of evolution with different brand building drivers. And while the three segments are not entirely

comparable as products, in evolutionary terms, salt is ahead.

Take FMCG giant HLL. It was some four years ago that HLL, based on recommendations by McKinsey's

Food & Agriculture Integrated Development Action (FAIDA) buoyant report on the foods industry, had

decided to push mass consumed staples such as atta, salt and rice. HLL's projections - of a million tones

by year 2000-01 - have since fallen short with current volumes of salt and atta adding up to less than

half-a-million tones. While rice has been pulled back and atta has seen a fall in market share this year, the

eight-year-old Annapurna salt is not only doing well, but is profitable at that. According to ORG-

MARG's retail store audit data for April 2002, the size of the iodized branded salt market is estimated at

15 lakh tones per annum (by value, about Rs 500 crore), and is estimated to be growing at 20 per cent

annually. National brands take a 45 per cent share, and local brands account for the remaining 55 per cent

share of this market. Compare this with other branded commodities - while branded, packaged sugar is

estimated to be a 40,000-tonne market, industry estimates peg the size of the domestic branded wheat

market at roughly 1.8 lakh tones. Tata Salt continues to reap the early bird advantage, with a leading 39

per cent share of the national branded salt segment, and a 17 per cent share of the total iodized branded

salt market. HLL's Annapurna salt brand is estimated to have a market share of about 16 per cent. (DCW

Chemicals' Captain Cook, launched in 1991, was subsequently acquired by International Best foods,

which in turn was acquired by Unilever.) HLL continues to distribute Captain Cook salt, but the brand

isn't being pushed as aggressively. New entrant Nature fresh, from the Cargill Foods stable, claims to be

showing positive results. "Nature fresh salt, introduced in December last year, has been able to make

inroads, generating switch in brand preference from the top end of the edible salt market. Other

significant branded players include Marico's Saffola, positioned as a niche, low-sodium brand introduced

about four years ago, and Nirma Shudh, which isn't completely national yet. Meanwhile, another

ambitious entrant that's making waves within the branded salt category is Dandi, launched last October

17

by Surat-based businessman Suresh Aggarwal. The brand is threatening to shake up market shares of

established players in the category. Dandi has already grabbed a four per cent share of the market, which

amounts to Rs 44 crore by value. The marketing mix for Dandi has been bang on - attacking tea through a

grassroots level Rs 8-crore ad campaign which gave the brand instant recognition, ensuring retail push,

and cross-selling (giving away a saree free with purchase of Dandi salt - the Kunvar Ajay saree brand is

owned by the same group). In addition to kitchen salt, one segment that has remained the stronghold of

the Delhi-based Rs 700-crore DS Group is that of table salt. The table salt market is limited - estimated at

Rs 25 crore - and dominated almost entirely by DS Foods' Catch brand. Catch, introduced in 1987, is

available in 16 different products (including spices and variants such as pepper and black salt) in 100 gm

tabletop dispensers, and has its production base in Noida. Catch free-flowing table salt's performance is

satisfactory, but there are no plans to extend it to kitchen salt. The brand occupies a niche and is doing

well for itself. Table salt, for example, has less than one per cent impurity compared to 30-40 per cent

impurities in kitchen salt. Even the best quality kitchen salt would be having an impurity level of 15-20

per cent.

So why is salt on stable turf while performance of other branded commodities has been, by and large,

patchy and below expectations? One of the reasons why salt is outperforming other branded

commodities is to do with the life span of branded salt being longer. Apart from that, there's been an

effective `iodine deficiency campaign', owing to which the penetration of branded salt is about 20 per

cent nationally, compared to one per cent for branded atta and sugar. While salt has been branded for

some two decades now, it is in recent times that the branded salt market has witnessed the entry of

several players. The trend of branded atta is only a three-four year old phenomenon, and unlike salt and

sugar, branded atta has very limited shelf life and freshness is crucial to end product quality. Besides,

significant laddering benefits of branded atta haven't yet evolved. As for branded sugar, the story is just

beginning, with brands like Dhampure coming up and Amul planning to enter the category.

But what about brand loyalty? Do differentiators such as `free flowing', `iodized', `granular' and `vacuum

evaporation' actually influence brand purchases when salt remains a low-value, low-involvement product

with few differentiators of significance? While the consumer is swayed by a number of brands and

benefits, which indicates low brand loyalty, there is a preference for reputed brands and familiar names.

That's because salt is a habitual product and the consumer doesn't prefer frequent brand switches. The

Indian consumer is willing to switch among a set of preferred brands, depending on availability, personal

preference and product offering. Once a consumer gets a certain branded salt free with another purchase,

the housewives may just continue with the brand.

18

Of course, distribution muscle is key. Tata Salt penetrates semi-urban and rural markets through economy

pack sizes and forms and product development for newer, more `evolved' offerings. And Dandi already

reaches 1,000 towns, piggybacking on 1,150 distributors.

So where is the much-talked-about commodity to brand movement headed for? "It will happen and at a

much faster pace now than before, due to the consumer's consistent quality demands and improving

supply chain of produce from farms." "The commodity market will progressively move into the branded

portfolio as long as the `value delivery' is in line with the product price. Margins will continue to be thin

till the consumer's perception of the differentiated values that brands offer over commodities changes

significantly.

19

PEST ANALYSIS OF INDUSTRY

Whichever the industry is, the political, economical, social & technological environment plays an

important role. These factors are the factors, which will influence the industry as a whole that means any

company cannot ignore the PEST for their further development. Following are some of the factors that

are influencing the edible salt industry.

POLITICAL/LEGAL FACTORS

Government has imposed a ban on non-iodized salt that means more market for the iodized salt in

the edible salt segment.

It is when a legion of 70 million goiter-affected people stand as a pointer to the magnitude of

iodine deficiency in the country that the Center has made a move to withdraw restriction on sale

of common edible salt.

Though de-licensed in 1996, the government retains a modicum of control over the industry. It

controls leasing of all Central Government land for salt manufacture along with planning the

production targets.

The Government has adopted the Universal Salt Ionization Programme under the aegis of the

World Health Organization.

The Central Government also supervises equitable distribution, monitors quality and prices,

ensures maintenance of standards and improvements quality and promotes technological

developments along with training of personnel. The salt department is under the purview of the

industry ministry and is responsible for collecting the salt cess, assignment fees, ground rent and

other dues.

On the welfare front, the government acts as a nodal agency for planning, formulating and

monitoring development and the labour welfare schemes. And if the issue is one of loss of

employment of some small-scale producers of salt, the solution is formation of salt co-operatives,

which should be given free equipment and other facilities for salt ionization.

As Gujarat is the main producer of Salt, the Government of Gujarat has exempted the Salt

industry form VAT that will be implemented from 1st of May.

The Center’s recent decision to impose anti-dumping duties on soda ash imports from China has

been hailed widely by the salt industry. It is felt that the results of this measure will soon be

visible in the healthier balance sheets of both the salt manufacturers and the soda ash and caustic

soda industries.

20

ECONOMICAL FACTOR

The U.S. is the world's largest salt producer as well as the largest consumer. The U.S. salt industry

earns more than $1 billion a year. The second-largest producer is China, then Germany, Canada,

and India.

Only 17 per cent of the iodized salt produced in India is of the refined category, which means that

the remaining 83 per cent salt is being produced by medium and small manufacturers.

Under normal conditions, of the average salt production (13.5 to 14 million tones), around 4.5 to 5

million tones is consumed for edible purposes while, 5 to 5.5 million is utilized for industrial

purposes. Industrial salt is also used extensively in the chemical industry for the manufacture of

plastics, glass, chlorine, soap, textiles, paints, rubber, paper and caustic soda for aluminum

production.

The annual increase in overall demand for the commodity is pegged at a healthy 10 per cent and

by 2005; the total demand for salt is expected to increase by 40 to 50 per cent.

Branded salt accounts for 20 per cent of a five million-tone market, say some industry analysts.

Valued at Rs 500 crore, the market is growing at 20 per cent per annum. Tata Salt leads the

market with around 30 per cent market share followed by Hindustan Lever's Annapurna and

DCW's Captain Cook at around 15 per cent.

Nirma Shudh salt, Surya salt, Saffola salt, Nature Fresh salt, Nutra salt and unorganized salt firm

are the major threats to the market leader.

SOCIOCULTURAL FACTORS

Iodine deficiency is the single most important cause of preventable brain damage and mental

retardation, most of the damage occurring before birth. It also significantly raises the risk of

stillbirth and miscarriage for pregnant women. The successful global campaign to iodize all edible

salt is reducing the risk associated with this deficiency, which threatened 1.6 billion people as

recently as 1992. Nevertheless, it is estimated that 43 million people worldwide are suffering from

varying degrees of brain damage; there are an estimated 11 million overt cretins. Some 760

million people have goiters.

The Tata Chemicals has also some social responsibility and brand commitment and to this end has

launched the Desh Ko Arpan programme where 10 paise on each pack of Tata Salt sold in a

month would go to CRY.

The salt is being consumed by richest to the rich and poorest to the poor, so the Government

maintains the affordability of the price.

21

Nirma Shudh Salt is providing the edible salt with best quality at lower cost to provide customer a

value for their money.

Dabur and Saffola have launched low sodium salt for the health conscious people, which is for the

better living of the people.

TECHNOLOGICAL FACTORS

National Research Development Corporation, Government of India Enterprise, is a premier

technology transfer Corporation with four decades of experience. It has helped establish over one

thousand projects in the small and medium scale sector and which will help the different

companies to set up their own plants.

Basically, Refined Iodized free Flowing Salt Plants are mainly of five types:

Vacuum Refinery.

Mechanical Refinery.

Solar evaporation of sea water

Sub-soil

Lake brine

Companies are using the latest technology day by day to increase the production of the salt. Nirma Shudh

Salt is using about 7 machines, which will produce about 10 packets in a second. That will help the

company to produce more and more.

22

FIVE-FORCES ANALYSIS OF INDUSTRY

According to this model the competition in an industry goes well beyond the established players.

Through this five-force model the different companies are able to source the different competitive

pressure that highlights the critical strengths and weakness of the company, which will help the company

to know its position in the market, and able to highlight the areas where industry trends promise to hold

the greatest significance as either opportunity or threats. Here the primary focus will be on the strategy of

the individual industry. Following are some aspect, which are cover for the purpose of five-force model

of the salt industry.

1) THREAT OF ENTRY

No license fees:

The cost of entry is negligible. If the person has the capital and salt field from where he can

produce the salt in a large quantity, the person can start the business. However according to the

role of Government, every company in this industry has to produce the edible salt according the

standard set by them with respect to the iodization.

Minimum set up cost:

The company required not much of the initial cost as the raw material and the labour forces are

easily available. The company has just the cost of establishing the plant.

Price war:

There are big players existing in the market like Tata, HLL, Nirma, Dabur, and Marico etc., which

has the stiff competition for the price. The local players are also the major threats to the

competitive market.

Scope for expansion:

As the companies existing in the edible salt market has the over capacity of the production and

they are producing more than consumption of India, the new entrants will face a major problem

for the purpose of remaining in the market. Thus those companies that have the huge profit from

other sources will think about entering into this market.

23

2) THREAT OF SUBSTITUTE:

The salt is consumed by the richest to rich and poorest to the poor and salt is the commodity, which is

required the most. For the purpose of health consciousness, salt is the best way to maintain the level of

iodine in the body. There is no substitute available for the salt and still there is no research is on for the

finding of the substitute. The salt is available in a huge quantity whenever and wherever required. Thus

there is no problem of availability of the salt at any point of time that will make the producers not to think

about the salt substitute. Thus as there is no threat of the substitute; the industry rivals will be able to

concentrate on other things rather than giving time on thinking about the salt substitute. However there

are companies who are thinking about introducing the edible salt in a tablet form. Thus there is a

substitute for the packaging but not for the commodity itself.

3) BARGAINING POWER OF BUYER

Because of the availability of different brands of edible salt, a very small income and low consumer

involvement require for the purchase of edible salt results in a very little cost for buyers on to other

players.

• Low switching cost.

• Industry comprises of big as well as many local players.

• Customers are low price sensitive.

4) BARGAINING POWER OF SUPPLIER

The suppliers of the salt industry cannot able to increase the price of commodity because of the huge

stock available in the market that means the importance of the commodity is not vary much high to the

customers and it is the low involvement product which is not required much of the interest of the

customers to buy the product. Thus, whichever company will try to increase the price of the commodity

will loose the market drastically and not been able to achieve the growth as expected by the company.

Thus the bargain power of the supplier is not very influencing as compare to the bargaining power of the

buyer. The only advantage to the suppliers is the non-availability of the substitute product, which makes

the customers to remain with the same commodity.

5) COMPETITIVE RIVELRY

Tata Salt (Tata Chemicals) is the market leader with sales of 0.29m-ton pa. Annapurna (HLL) and

Captain Cook (DCW Home Products) are the two other major brands, which sell about 0.2mn and 0.3mn

ton pa each. While Captain Cook is positioned on the USP of free flowing nature of its salt, Tata Salt is

24

positioned on purity platform and Annapurna is positioned on the health benefit impact of the iodine

content in the salt. Nirma and Dabur are the two latest entrants in the branded salt market. Tata Salt, the

first branded salt in the country, was launched in 1983. Tata salt is manufactured by Tata Chemicals as a

by-product of its water distillation plant. DCW launched salt in 1991. It has three plants in Maharashtra,

Gujarat and Tamil Nadu. In August’ 98, Corn Products Company (India) Ltd (manufacturer of Knorr

brand of soups) acquired the Captain Cook brand and the salt manufacturing facility at Gandhidham for a

consideration of Rs900mn. Corn Products, renamed as International Best foods Limited wef October ‘98,

will now be one of the leading players in the segment. Hindustan Lever’s Annapurna was launched in

1996. HLL operates three plants at Maharashtra, Delhi & Bangalore. Nirma is setting up a soda ash plant,

which will produce 280,000 TPA of salt as by product. The company is currently test marketing Nirma

Free Flow Salt. Nirma has the advantage of a well-established distribution network of grocery stores

(where its soap and detergent brands are typically sold). With its strategy of competitive pricing, the

company has the potential to become a significant player in the segment Dabur has recently launched

Nutra salt, a low sodium salt. Marico has also launched Saffola salt which is a mineral enriched low

sodium salt. Both the above brands are positioned on the health platform, and are priced at a significant

premium to normal salt brands. Besides there are a large number of other local/regional brands in refined

and iodized salt.

25

COMPETITIVE ANALYSIS

The company, who wants to be the market leader in the edible salt segment, must know their competitor

from the bottom. Here we have tried to explore as many competitors as possible, which will help the

Nirma to know about their competitor. While talking about the different competitors of Nirma Shudh

Salt, let see where the company stands in the market first.

NIRMA INDUSTRIES LTD. (NIRMA SHUDH SALT)

Nirma is an over Rs. 17 billion brand with a leadership presence in Detergents, Soaps and Personal Care

Products, offering employment to over 15,000 people. Mr. K. K. Patel introduced the Brand in 1969.

Making phosphate free synthetic detergent powder by hand and selling it at Rs. 3/- per kg., when the

lowest priced detergent brand was Rs. 13/-. This value-for-money plank revolutionized the industry and

made fabric wash detergents available to the masses. Today, Nirma sells over 800,000 tones of it's

detergent products annually, giving it a 35% share of the Indian Market, which is the world's second

largest fabric wash products market. This makes Nirma India's largest detergent marketer and one of the

world's biggest detergent brands. Even though Nirma was a late entrant in 1990 in the highly competitive

toilet shop market, it is already the second largest manufacturer, selling close to 1,06,000 MT of bathing

soaps in 1999-00. The brand has over the years introduced products in toiletries and personal care with

soaps, shampoos and toothpaste, thus offering the consumer a complete product portfolio. Carrying on

Nirma's mission of providing 'Better Products, Better Value, Better Living' to its over 300 million

consumers through an efficient distribution network.

Following are the main competitors of Nirma Shudh Salt in the Edible Salt industry. The company can

only be successful if they know about their competitor very well.

TATA CHEMICALS LTD. (TATA SALT)

Launched in August 1983, Tata Salt was the first national brand of packaged salt to be marketed in India.

To millions of Indian housewives, it presented a welcome move away from the loose, unbranded salt of

suspect quality to the reassurance of clean, pure salt — guaranteed by India’s most trusted business

house. Tata Salt leads the way as first mover and leader in the branded iodized salt market. It has a 17-

per-cent market share in the branded salt category and among national brands; its share is higher at 38 per

cent. The marketing strategy would be to continue expanding reach and availability of the product while

improving the market base. It will continue upgrading users of unbranded, unhygienic loose salt and

continue to improve product and packaging offering to the consumer. The company has also some social

26

responsibility and brand commitment and to this end has launched the Desh Ko Arpan programme where

10 paise on each pack of Tata Salt sold in a month would go to CRY. An average of three crore Tata Salt

packs are sold each month. Advertising for the product largely revolved around the television medium

with Doordarshan forming the dominant chunk of its media plan given it still has the highest reach

especially in areas like UP, MP and Bihar where vast numbers of consumers are unbranded and loose salt

users. This year will see TCL spend about Rs 10 crore on advertising between the Tata Salt and

Samunder brands. Though the market is competitive with multinationals and Indian firms alike pumping

money into messaging the consumer, Tata Salt will continue to lead as long as it reaches out and makes

itself available. The company always has an ear to the ground to be in touch with the consumer's needs.

The company is also exporting their salt to the Middle East and Bangladesh.

MARICO INDUSTRIES LTD. (SAFFOLA SALT)

Marico Industries with an extension of the Saffola brand equity, a 30-year old kardi oil brand associated

with "the heart of a healthy family", to salt which forms part of a larger purpose: to develop Saffola into a

strong umbrella brand riding on its age-old USP of "good for the heart". There was a need in the

marketplace for such a product, which cannot be directly, compared to other branded salts because of the

price premium those Saffola salt commands. Saffola salt is priced at Rs. 25 for a one kg jar (this is the

first time that the most common food ingredient salt is being introduced in a jar form. The price premium

is partly due to this additional cost). The company has launched the salt in select towns like Mumbai,

Delhi, Chandigarh, Calcutta and Pune at a special price of Rs. 20. The pricing may, a complete value to

the consumer who gets a re-usable jar along with the salt. The company may later look at introducing

other sizes and try to cut down on the cost, which would eventually bring down the price to the consumer.

However, this price would still be at a slight premium over other branded salts in the market due to its

unique qualities, put off a consumer who’s used to paying Rs. 6 to Rs. 7 for a kg of common salt. Salt for

Saffola, well known among those health conscious consumers? The thinking behind extending the brand

to the common salt was simple: "Because salt is the main intake most consumers suffering from

hypertension, a common heart ailment, are asked to cut down on. They have tested the salt with doctors

and have been introspecting on the concept for over a year now. It involves, in addition to iodizing the

salt, a reduction of around 25 per cent of sodium, which has been substituted by an equivalent amount of

potassium. Further, they have also not compromised on the taste element. The company has not yet

launched any conventional modes of promotions like advertising. The company feels that the Saffola-

conscious consumer is the company's primary target and that would mean four lakh households. As far as

penetration is concerned, Saffola salt, like the oil, will be an urban phenomenon. Although Saffola salt

27

has been launched without much fanfare, the repeat purchases since its launch a few days back are

commendable.

HINDUSTAN LEVER (INDIA) LTD. (ANNAPURNA SALT)

Hindustan Lever’s Annapurna was launched in 1996. HLL operates three plants at Maharashtra, Delhi &

Bangalore. The company has achieved almost 30% market share across the country but not able to do too

much of the business in western segment. The company has more market share towards the northern part

of the country. The company has the advantage of best and most successful distribution network for their

different product line, which has help, the company to provide the edible salt whenever and wherever

required. The company has also launched its consumer schemes of two sachet of Clinic all Clear free

with the 1 Kg pack of Annapurna salt. The company is also focusing on the southern region of the

country where the local players has the more market share. The company has acquired the Captain Cook

brand from the Corn Products Company. The only brand where there is an overlap is Captain Cook in the

staple food categories of salt and atta. With both Captain Cook as well as Kissan Annapurna currently

being sold on an almost similar price platform, a re-look at the positioning of the Captain Cook brand is

inevitable. Also problems faced post acquisition and inadequate marketing support has somewhat

tarnished the equity of this once extremely popular brand. But given that the brand even today enjoys a

strong recall, it is unlikely that Captain Cook will die a silent death. A more likely possibility is that HLL

will use Captain Cook as a flanking brand, positioning it in a different consumer price segment, as has

been HLL’s strategy in most product categories. Besides the brand provides HLL an excellent

opportunity to strengthen its position against Godrej Pillsbury and Tata Salt the two most potent

competitors in the atta and salt markets.

KUNVAR AJAY INDUSTRIES (DANDI SALT)

Unleashing a multi-brand strategy, the company has decided to launch its first product, salt, under the

Dandi brand, with more products to follow under different brand names. With no synergies between the

two lines of business, the 20-year old saree player has decided to get adventurous and venture into the

guarded territories of biggies such as Hindustan Lever and the Tatas. Pricing their brand of Dandi on par

with the existing brands of Annapurna and Tata salt, the Rs 7 per one kilo bags are being made available

at a national level. Relying purely on internal funds, the company, which heavily advertised its saree

brand on a budget of nearly Rs 25 crore, has marked a healthy budget of Rs 10 crore for its new salt

brand. Using the USP of being a pure product, it is the triple-refined process in manufacturing which is

expected to hold the product in good stead (considering most branded salts are double-refined). The

company has positioned itself as the Amrit hai buddhi aur Shakti ke liye (good for the health and mind)

that may make a difference in this competitive industry. Realizing that distribution will be the key to

28

getting its products accepted, the company has already covered 414 towns reaching out to half-a-million

retailers within the 14 weeks since launch. It aims to reach out its salt to two lakh retailers by March.

Besides, it has also decided to sell its salt on an advance demand draft system, breaking away from the

long credit-based system adopted for its saree business.

CARGILL (INDIA) PRIVATE LTD. (NATURE FRESH):

Nature Fresh, Cargill India's staples brand, is forcing big names in the highly fragmented and competitive

market to take note of it. Catalyst presents insights into Operation Cargill. If Nature Fresh is making big

names in the industry sit up and takes note, it is because Cargill India is not exactly just a new kid on the

block. Cargill India Pvt. Ltd., the 100 per cent subsidiary of the Minneapolis-based, $49 billion agri foods

major, has varied interests. And given its historical strengths in agri-economy and logistics management,

Cargill India is advantageously positioned to service its supply chain. And according to ORG-MARG's

retail store audit data, the size of the iodized branded salt market is estimated at 15 lakh tones per annum

(which works out to about Rs 500 crore by value). National brands comprise only 45 per cent share of

this market. Among other reasons, one reason why salt is bigger than other branded commodities is the

Government's iodization drive. According to Cargill officials, the new advertising will be significantly

different from the earlier communication. While ad and promotional budgets are not available, the

company says it is doing the needful to take the battle of the brand head on.

UNBRANDED\LOCAL PLAYERS

The major threat to any company in the edible salt segment is with the local unbranded players. There is a

huge market for the loose salt because of its cheapest price. This unorganized sector has covered about

85% market of the edible salt market. If any company will overcome this problem then there is a huge

market for the edible salt. There are many local players existing in Gujarat, namely, Taja, Tara, Haathi,

Sagar, Ambica, Shagun, Umiya etc. they are major threat to the edible salt industry, which must be

overcome.

29

PROMOTIONAL CAMPAIGN IN EDIBLE SALT INDUSTRY

Tata company manufactured Tata Salt, India’s first iodized salt. The first competitive challenge came in

the early 1990s with the launch of Captain Cook. Positioned as a free–flowing salt, it helped create

awareness about brands in the salt segment. Tata Chemicals responded by releasing ads to counter

Captain Cook’s claims. As more consumers moved from non-branded or local products to the national

brands, Tata Salt’s inherent superiority and strong distribution network ensured its continuing growth in

terms of market share and category expansion. In 1996, Annapurna, another national salt brand, was

launched. It was positioned on the health benefits of iodine. Iodization had become almost a hygiene

factor and consumers did not perceive it as a differentiator. The rising number of players in the branded-

salt segment got Tata Chemicals to think of strategies to combat the possibility of its market share being

eroded. In 1998, the company conducted a comprehensive market research study to understand the

consumer psyche. The results ranked Tata Salt high on attributes such as iodization, free flow, purity and

whiteness (consumers thought of Tata Salt as a ‘saltier salt’).

Acquired from DCW Home Products Ltd for an estimated price of Rs 85 crore, the brand is back on retail

shelves after a hiatus of nine months. Captain Cook is available at an introductory price of Rs 6 per one

kg pouch, which is a 25 per cent discount to brands like Kissan Annapurna from Hindustan Lever and

Tata Chemicals' Tata salt. Although the company was not available for comment, an International Best

food has not made any major changes in the product packaging. Even the ad campaign, is a re-run of the

mid-nineties campaign.

During the past one year, the complexion of the Rs 100 crore branded salt market has changed

considerably. There is a new entrance in the market -- Marico Industries Limited -, which launched two

variants of branded salt under the Saffola umbrella. The existing players, Tata Salt and HLL's Kissan

Annapurna salt have been aggressively pitching for market shares. Tata Salt and Annapurna have gained

market share at the expense of Captain Cook, which has lost around four per cent market share to 11 per

cent due to erratic supply over the past one year. Tata Salt leads the market with an estimated share of 33

per cent. The second in the rung is Annapurna, with close to 16 per cent share.

Owing to increased competition in the marketplace, the `free flow' proposition that had established the

Captain Cook brand in the early 1990’s is quite basic to the category by now. Marketers have started

`adding value' and hard selling ingredients in the branded commodities market.

While Tata salt changed its positioning to `vacuum evaporated ' from `iodized salt' a few months ago, the

product ingredient `iodine K15' is the focal point of communication for Annapurna salt. Marico Industries

30

is also not offering anything basic with its `potassium enriched salt' that hinges on the strong `heart care'

equity of Saffola. Analysts say that Captain Cook has challenging times ahead in a competitive

environment. With branded salt contributing close to 20 per cent of a five million-tone market, this

category has huge potential going by the 20 per cent growth per annum.

AFTER colas and toothpaste, the stage is set for another potential ad war on the fast moving consumer

goods front. This time around, it is the good old salt, which is turning out to become the bone of

contention between two major players. Tata Chemicals, which markets Tata Salt, has taken umbrage to

the electronic campaign for Hindustan Lever's Annapurna salt. Tata Chemicals has approached the

Advertising Standards Council of India (ASCI) against the currently on air advertising for Annapurna

salt, which ends with a child bidding goodbye (or `Tata') to all other salts available in the market.

According to ORG-MARG estimates, the domestic branded salt market, by volume, is estimated at 15

lakh tones. Tata Salt leads in the branded salt market with a market share of 18 per cent, according to a

recent ORG-MARG retail audit. HLL's Annapurna, which has been very aggressive in marketing-related

activities in the recent months, has a market share of 16 per cent.

Another recent entrant to the branded salt category is Dandi salt. While this brand is being advertised

heavily on regional channels, it has managed to gain only a 1.5 per cent share of the branded salt market,

according to ORG-MARG estimates.

Apart from Tata Salt and HLL's Annapurna, the market share of other players is by and large fragmented,

according to industry analysts. The unbranded sector continues to control a sizeable share of the overall

salt market in the country.

31

NIRMA INDUSTRY

INTRODUCTION

Nirma is the Rs.17 billion Detergents, Soaps and Personal Care Products Brand, a

market leader in the Indian detergent market and second largest in bathing soaps... the brand NIRMA being one of the world's

biggest in it's segment... a result of it's mission to provide

'BETTER PRODUCTS, BETTER VALUE, BETTER LIVING'.

Shri Karshanbhai Patel's vision introduced a new philosophy or approach, which held that better quality,

can be offered even at lower prices. NIRMA in late seventies introduced the concept of TOTAL

QUALITY MANAGEMENT (TQM) in Indian detergent market. It not only followed kaizen & kanban

the famous management philosophies. But more importantly it followed them successfully.

At NIRMA, they first identify the market, establish themselves there & then try for a market unlike others

who first advertise & then try for a market share. His philosophy has always been: " first test the market

& then advertise, Go to the public with a good product, establish it in the market & then go for publicity."

The cornerstone of Nirma business philosophy is captured pithily in their new slogan, "Better products,

Better Value, Better Living."

Karshanbhai's business policy may be stated thus: " Good quality at a affordable price makes selling

automatic."

Karshanbhai's NIRMA was catapulted by " A smart pricing strategy for a particular quality to a

developing mass market."

32

Shri Karshanbhai Patel attributes his entrepreneurial success to:

Enjoying work more than the monetary gains.

Enjoying smile on the faces of a satisfied NIRMA customer.

Ability of taking right decision at the right time.

Vision, Mision & Philosophy

Nirma is a customer-focused company committed to consistently offer better uality products and services

that maximise value to the customer.

This customer-centric philosophy has been well emphasised at Nirma through:

� Continuously exploring & developing new products & processes.

� Laying emphasis on cost effectiveness.

� Maintaining effective Quality Management System.

� Complying with safety, environment and social obligations.

� Imparting training to all involved on a continuous basis.

� Teamwork and active participation all around.

� Demonstrating belongingness and exemplary behavior towards organisation, its goals and objectives.

Nirma is a phenomenon and synonymous with Value for Money. The brand transcends the specific

dynamic of any particular product category, which is best captured in its above mission statement – a

statement of sustained innovation, an unceasing effort to deliver better value to consumers, through better

product quality.

Shri Karshanbhai, from a chemist with Gujarat Government's department of mining & Geology became

the owner of the market leader in detergent business. His business vision & ability to understand what

consumer need & wants, allowed him to transform his backyard business into a reputed market leading

company. India is a famous for the leader like Dhirubhai Ambani, J.R.D. Tata, Azeem Premji, and

Narayan Murti. Among the corporate leaders of Gujarat, Shri Karshanbhai Patel's name stands apart.

Shri Karshanbhai's success is the inspiring story of a self-made man who inherited neither a family

business nor a business background. Coming from a family of farmers he has risen to be among the most

powerful impact generating entrepreneurs of our country.

Shri Karshanbhai Patel, a down to earth man started a moon-lighting activity choosing to manufacture a

down-to-earth product for the ordinary, average, not-too-rich, not-too-sophisticated consumer & met sky

rocketing success leveling multinational like Hindustan Lever in lower and humbler clouds.

33

Karshanbhai was born in 1944 in Ruppapur, a small village in Gujarat. Karshanbhai's went to school

there & later at the age of nineteen, qualified as a chemist with a B.Sc. Degree. For the next six years, he

worked as a laboratory technician first at the cotton mills & later in the Gujarat Government's Department

of Mining & Geology.

In his free time in the evenings, with the limited know-how he has acquired at work, he started

experimenting in the background of his house to produce liquid detergent. The idea, however, has to be

promptly abandoned, as liquid detergent was difficult to make & would certainly be difficult to market,

for it was too new a concept for the consumer.

Then he tried his hand at making detergent powder & succeeded. The production started in 1969, with

initial investment of Rs. 1000/- borrowed from friends & relatives. Karshanbhai set up a company

"NIRMA Chemical works" named after his one -year -old daughter Nirma (Nirupama). The process of

manufacturing the detergent powder was manual & required no sophisticated machinery or technology.

For the next three years, Karshanbhai managed a one-man show in the time he had at his disposal after

his office hours. At that time, he followed one man - door-to-door marketing. Slowly and gradually,

price-conscious housewives became eager buyer of this homemade and low-priced (Rs. 3/kg) product.

Karshanbhai was selling on a satisfaction or refund basis. Thus a whole new market of middle-class

consumer was created. Initially, the powder was sold to some friends and relatives, then to us many

customers as Karshanbhai could pedal to, a new salesman were hired on commission basis for selling

door-to-door.

A salaried chemist by day and manufacture, distributor and service manager by evening, Karshanbhai

became a well-known figure though his personalized attention to his customers. The demand for his

product increased, the profits improved and the future crystallized. He gave up his Government job and

expanded his moonlighting ventures into a fall-time manufacturing operation in 1972.

At this stage, he found small 12-sq. yard industrial shed in Khokhara Mehmedabad near Ahmedabad and

shifted his production there. Within three years, Nirma had established a market in Gujarat and

Maharastra. Then came on the plastic bag of the detergent powder, now nation wide picture of his

dancing in a sparkling white frock. In 1977, Karshanbhai started advertising on the radio! Slides were

made for advertising on the cinema screen also. These were followed by the resounding television

advertisements. All this publicity paid of in rich measure. Within five years, Nirma was visible on the

national scene. Nirma had distributed the well-settled Hindustan Lever and notched up 60% of the

34

powder market share in the western region and dislodged Hindustan Lever from the first position. An

almost primitive manufacturing process and some ingenious marketing was giving the professionally-

managed company's product a run for its money. Karshanbhai's company has always used a well-planned

business strategy and marketing policy to hold its price line. Increase in the costs of raw material and

labor has been offset by increase in production. Nirma have used the concept of value engineering. They

avoided the use of those ingredients, which did not give functional value for the money. Karshanbhai's

looks at his cost versus what people are willing to pay. Today, round about 5,00,000 retailers’ watch

Nirma packets disappear from their shelves. Nirma is the impressive success story of the simple.

Unassuming man is manufacturing a down-market product by using appropriate technology. Which is

neither very modern nor sophisticated. It is the story of a company that rose from a 12-sq. yard covering

factories at Vatva, Chhatral and Mehsana in Gujarat. From making a small lot of a powder once a week in

1969, Karshanbhai moved up to 500 kg. A month in 1972 and today is selling 1,200 tunes of powder 700

tunes of detergent cakes per day. Over 200 trucks line up near he gates of Nirma plants, to pick up the

product to satisfy the large and growing demand steadily at he rate of 50% for the last 14 years. In no

country anywhere in the world does one company sell much detergent less than one brand name.

35

PRODUCT LIST

DETERGENT POWDERS:

• Nirma washing powder

• Super nirma detergent powder

• Nirma popular detergent powder

• Green nirma washing powder

• Nima detergent powder

DETERGENT CAKES:

• Nirma popular detergent cake

• Nirma detergent cake

• Super nirma detergent cake

• Nima green detergent cake

• Nima blue detergent cake

• Nimabartan bar

• Nirma clean

BATHING SOAPS:

Nirma beauty soap

Nirma bath soap (carbolic)

Nirma premium soap

Nirma lime fresh soap

Nima rose

Nima lime

Nima winner

Nima sandal

Nirma rose

Nima herbal

Nirma herblina

OTHER PRODUCTS:

• Nirma beauty shampoo

• Nirma shikakai

• Nirma toothpaste

• Nirma shudh iodized free flow salt

36

INDUSTRIAL PRODUCTS:

• Sulphuric acid

• Linear alkyl benzene

• Glycerin

• Fatty acids

• Soda ash

MANUFACTUIRNG PLANTS:

• Mehsana Gujarat

• Ahmedabad Gujarat

• Bhavnagar Gujarat

• Rajkot Gujarat

• Dhar Madhya Pradesh

• Kanpur Uttar Pradesh

37

NIRMA SHUDH SALT

The edible salt industry in India is unique in away that it is only 10% branded the rest constitute of

unbranded loose salt. The per capita consumption is 6 kg though the point to ponder is the rate at which

unbranded market will convert to the branded. Nirma has decided to become the driver of this growth.

The salt market provides attractive avenues for Nirma, as there are huge volumes and low branded salt

penetration. Nirma salt has one of the best qualities in terms iodine content of 30 ppm, free flow property,

whiteness and saltiness. It is refined through a process, which retains natural mineral content in balanced

quantity. The moisture proof pack keeps Nirma Iodized Salt non sticky and fresh. The salt is available in

1 kg pack size.

MARKETING STRATEGY

"Marketing strategy is nothing but a combination of decisions bearing of the various aspects of marketing

mix". These are product, pricing, delivery, distribution, packaging and promotion. NIRMA concentrate

more on all aspect that's why NIRMA has very good market in not only Gujarat but also in other state of

the India.

1. For product planning:

NIRMA take decision for new product whether product or not?

Then they research the product by research department.

Research departments are divided as under:

2. MIS:

In this step they collect details about competitors product.

They saw the pricing of product features, advertisement, packing fragrance promotion of

product etc.

3. After this two-step they do the production of a particular product.

38

MARKET SEGMENTATION

We know that market segmentation means dividing a market into district groups of buyers with different

needs, characteristic or behavior. We might require separate products or marketing mixes? It refers to

large heterogeneous market into smaller homogeneous parts in order to select any one out them in which

the company thinks it

satisfy customer more effectively different products for different segmentation. Male/female

segmentation & fragmentation are also part of market segmentation. For larger, the target is fulfilling by

the help of advertisement & promotional base. There are different classes of people purchasing the

product of NIRMA, like…

Lower middle class family

Middle class family

Upper middle class family

Higher-class family

PRICING POLICIES

Price refers to the value of product attributes. Expressed in monetary terms with a customer pay or is

accepted or afford utility. Value is referring to the quantitative aspect product relative to other product.

In NIRMA, Pricing Policies of work like as under:

MIS

First MIS show the price of competitors.

Parallel Pricing Policy:

1. Bunch marketing

2. Profit margin

They give 5% to retailers, 1% to distributors & the company will get the

remaining profit.

Nirma’s main objective is service rather than profit. No doubt there is profit but pricing is just to meet

minimum margin. Thus it has bee observed that their pricing policy is very effective in the rural market.

39

Company wants to maximize its profit then unit established higher policy. The company wants to cover

the larger part of the market and for that the company may establish negligible profit policies for its

different products.

CHANNEL OF DISTRIBUTION

The channel of distribution will play an important role for the company that are operating their business

in the edible salt market because people will buy only that product which will be available at the purchase

outlet. The level of brand switching is high here. Thus channel of distribution will play an important role

for effective reach to the end consumer.

FACTORY

AGENTS

DEPOTS

RETAILERS

WHOLESELLER

CONSUMERS

The other channel of distribution is as follows:

COMPANY

STOCKPOINT

DISTRIBUTORS

RETAILERS\WHOLESALER

CONSUMER

40

SALES PROMOTION

We know that sales promotion means short-term incentives to encourage purchase or sales of a products

or services. The company, Nirma is also providing sales promotions to promote their brands like:

CONSUMER PROMOTIONS

TRADE PROMOTIONS

SALES FORCE PROMOTION

PROMOTIONAL EXPENCES

NIRMA does promotional expenses as under:

TOTAL PROMOTIONAL EXPENSE

(3% OF SALES)

ADVERTISING SALES PROMOTION

(2% OF SALES) (1% OF SALES)

PRESS TELEVISION CINEMA RADIO OUTDOOR

25% 35% 20% 15% 5%

Among all tools of promotion, advertising is given prime importance by the company. That can be seen

from the above chart. More stress is put on Television. Press Media is also given importance.

41

SWOT ANALYSIS

OF

NIRMA SHUDH SALT

A scan of the internal and external environment is an important part of the strategic planning process. The

SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to

the competitive environment in which it operates. As such, it is instrumental in strategy formulation and

selection.

The company Nirma has following strength and weakness, which will help the company to decide about

the future planning for their success in their edible salt business.

STRENGTHS

• Strong Brand equity. Nirma is an Rs.17 billion-umbrella brand offering consumers a broad

portfolio of products at multiple price points in the Detergents, Soaps, Salt and Personal Care

market.

• Produces a range of industrial chemical products which primarily serve as raw material or

intermediates for Soaps & Detergents business.

• Wide distribution network.

• Good advantage in the rural market because of its price.

WEAKNESS

• High interest burden.

• Less presence in premium segment.

• Lacking in the export market.

42

OPPORTUNITIES

• Exports

• Acquisitions for strengthening its distribution tie-ups.

• Entry into the South Indian market where there is a huge market for edible salt, which is not,

captured by any national player and occupied by the unorganized sector.

• Entry into the tablet salt market.

• Government rule of selling only iodized salt, which will generate a huge market.

THREATS

• Emergence of regional but strong players.

• Entry of many big players like Adani, Marico, Kunvar Ajay etc. is a big disadvantage.

• Poor quality image of a company about the product in the urban areas.

43

44

(1) Do you use Iodised Salt or Uniodisd Salt?

(_) Iodised (_) Uniodised

Now a day’s most of the people are aware about the benefits of the Iodised Salt because iodine is a

necessary requirement of a body and it will also helpful in curing some diseases like Thyroid, Goiter.

Thus the awareness regarding the iodized salt is necessary. Following are some numbers which will

shows the awareness regarding the iodized salt in a particular area.

Interpretation:

From the graph we can conclude that there are 92% of the respondents are aware about the

Iodised salt and they are using Iodised Salt and still 8% of the respondents don’t know about the Iodised

Salt.so there is more chance of occurring iodine deficiency disease to them.

No.of

respondents

Iodised Salt 229

Uniodised Salt 21

45

(2) Which brand of Iodised salt do you use?

___________________________________________________

Interpretation:

On the basis of this question preference for using Nirma Shudh Salt with other is easily found

out by Respondents, so one can have rough idea about the market standing of the Nirma Shudh Salt with

Other brand.

Here TATA Salt is leading with 33% of the market of the Iodised Salt and it is followed by the Nirma

Shudh Salt as 22% of the market of the Iodised salt. Annapurna and Dandi having shares of 13% and

TATA 76

NIRMA 49

ANNAPURNA 34

DANDI 30

SAFFOLA 12

CAPTAIN COOK 12

LOCAL 16

46

15% respectively. In my sample size there are 7% of the respondents who are using local brands like

Ambika and Taja salt.

So I conclude that awareness regarding Nirma Shudh Salt is up to the mark as 22% of the market share of

Iodised salt is acquired by the Nirma Shudh Salt.

Nirma Shudh is not able to grasp good market though it has a good distribution network. Actually there is

a need for the company to convenience people through advertisement to purchase their brand at a lower

cost and best quality.

TATA NIRMA DANDI ANNAPURNA CAPTAIN

COOK

OTHERS

MANINAGAR 14 9 4 6 3 0

RANIP 18 10 6 4 2 0

SATELLITE 17 7 3 5 2 0

SARASPUR 10 9 4 8 2 4

MEGHANINAGAR 11 7 8 5 3 3

NARODA 6 8 5 6 0 9

From this graph it is easily concluded that users of the Nirma Shudh salt are ranging from 17% to

23% which is equal to the overall users of Nirma Shudh salt for Ahmedabad area.

47

(3) On what basis do you select the salt brand?(Rank from 1 to 5 where 1 is best )

(_) Price

(_) Free flow

(_) Whiteness

(_) Brand Name

(_) taste

Interpretation:

It is very important for any company that on what criteria or basis their product is purchased by

the consumers. Here there are main five criteria on the basis of which consumers are using the salt. Here

Respondents are asked to give Rank between 1 to 5(where 1 is best). After calculating the ranking

preference Taste stood at first position with 47.15%, Price stood at second with 31.44%, Free flow stood

at third position with 42.35%, Brand Name stood fourth with 31.44% and last whiteness of the salt with

49.33% of all the criteria.

48

AVERAGE

MEAN

PRICE 2.86

FREE FLOW 3.00

WHITENESS 3.84

BRAND NAME 3.37

TASTE 1.85

Here it is easily concluded from the above graph that taste is mostly preferred followed by price,

free flow, brand name and whiteness for the selection of the salt brand by the consumers.

49

(4) Do you use same brand of the salt everytime?

(_) Yes (_) No

Yes 157

No 72

Interpretation:

With the help of this question brand loyalty of the respondents for the Iodised salt is found out.

Here there are 69% of the respondents are brand loyal to same salt brand where as 31% of the

respondents are not brand loyal.

50

(5) How often do you purchase salt?

(_) 15 days duration number of Packets: _______

(_) 1 month duration number of Packets: _______

(_) 1.5 months duration number of Packets: _______

(_) 2 months duration number of Packets: _______

No. of

Respondents

15 Days 53

1 Month 157

1.5 Month 19

2 Month 0

Interpretation:

Here from the graph and responses obtained there are 69% of the respondents purchase salts monthly

where as 23% of respondents purchase salt fortnightly.

51

No. of

Respondents

No. of

family

member

1 packet 13 2

2 packets 117 5

3 packets 22 6

4 packets 5 7

And out of the 157 respondents 75% are using 2 packets of the 1 kg salt.

52

Interpretation:

From this graph one can conclude that 1 packet (1kg) of salt is used by 2 family member for

one month, 2 packets of salt are used by 5 member of the family monthly, 3 packets of salt are used by 6

member monthly, 4 packets are used by 7 member of the family for 1 month so one can have idea about

family size, purchase pattern and no. of packet required for 1 month.

53

(6) Who decides of purchasing salt?

(_) Elders (_) Husband

(_) Wife (_) others ___________

ELDER 63

HUSBAND 41

WIFE 78

OTHERS 47

Interpretation:

Here from the graph it is concluded that 34% of the purchase decision are taken up by wife, 18% of

husband takes purchase decision, 27% of the purchase decision is taken by elders of the family and 21%

of the decision is taken by the others (housewife).

54

(7) From where you purchase salt?

(_) Super Market (_) Provision Store

(_) Convenience Shop (_) any other___________

super market 48

Convenience Shop 65

provision store 105

other 11

Interpretation:

46% of the respondents are purchasing salt from the provision store, 28% of the respondents are

purchasing salt from nearby shop, 21% of the respondents are purchasing salt from supermarket and 5 %

of the respondents are purchasing from different places like Mall, Departmental store etc.

55

(8) Have you ever used Nirma Shudh Salt?

(_) Yes (_) No.

Interpretation:

There are 62% of the total respondents who have used Nirma Shudh Salt one or more time but out

of that many respondents are not stick to one brand that’s why market share is lower than TATA.

56

(9) If yes, what do you like most about Nirma Shudh Salt?( Rank from 1 to 5 where 1 is best )

(_) Whiteness

(_) Free flow

(_) Price

(_) Double refined Salt

(_) taste

Interpretation:

From the graph it is concluded that for the use if Nirma Shudh Salt consumer prefer price at first

rank followed by taste, double refined salt, free flow and whiteness.

57

(11) How you find the price of Nirma Shudh salt?

(_) Very High (_) High (_) Average

(_) Low (_) Very low

If high, then what do you think the price should be for Nirma Shudh salt?

Price: ________Rs/Kg.

very high 0

High 0

Average 174

Low 55

very low 0

Interpretation:

76% of the Nirma Shudh Salt user saying that they find price of the salt as average price and 24%

of respondents find price low as compared to other salt brands.

58

(12) From where you influenced to purchase Nirma Shudh Salt?

(_) Advertisement (_) Friends (_) Relatives

(_) Retailers (_) Others ______

If Advertisement, then what was the media?

(_) Television (_) News paper (_) Radio

(_) Hoardings (_) Magazines

(_) Other __________

ADVERTISEMENT 115

FRIENDS 40

RETAILERS 48

RELATIVES 22

Interpretation:

Advertisement of the Nirma Shudh salt is the main influencer for the purchasing of Nirma

Shudh salt as 51% of the respondents are influenced by the advertisement in different media. It is

followed by friends, retailers and relatives as 21%,18% and 10% respectively.

59

MAGAZINES 74

NEWSPAPER 5

RADIO 0

HORDINGS 0

Television 68

Interpretation:

Those who are influenced by the advertisement are mostly influenced by two media one is TV AS

broadcasting media and Magazine as print media.

60

(13) Have you seen the Television Advertisement of the Nirma Shudh Salt?

(_) Yes (_) No

If Yes, How did you find it in terms of message?

(_) Very good (_) Good (_) Average

(_) Bad (_) Very bad

Interpretation:

Here there are 85% of the respondents said that they had seen the television advertisement.

NO. of

respondents

YES 195

NO 34

No. of

respondents

very good 6

Good 96

Average 62

Bad 31

very bad

61

Interpretation:

Out of those 85% respondents 49% had find advertisement good, 3%find it very good, 32% of them find

ad average and 16% of them find it bad so it is concluded that TV ad prepared is good at some extent.

62

(14) Do you find any difficulty in availability of Nirma Shudh Salt?

(_) Yes (_) No.

yes 10

No 219

Interpretation:

Here 96% of the respondents don’t find any difficulty in availability of Nirma Shudh salt whereas 4% of

them find difficulty in availability. So it is concluded that there is no shortage of the stock for Nirma

Shudh Salt.

63

(15) If Nirma Shudh Salt is not available in store, you will,

(_) Try another brand (_) Go to another shop

(_) Postpone Purchase

try another brand 167

go to another shop 14

postpone purchase 48

Interpretation:

Here if there is stock out situation for Nirma Shudh salt then 73% of respondents will try another brand of

salt, 6% will go to another shop and 21% will postpone their purchase so they are not stick to one brand.

64

(16) Do you like the packaging of Nirma Shudh Salt?

(_) Yes (_) No

Yes 118

No 110

Interpretation:

Here 48% of the respondents said that they don’t like packaging of the Nirma Shudh salt Where

as 52% of the respondents like the packaging.

So as respondents who don’t like packaging of salt is high so there will be requirement for

changing the packaging of the Nirma Shudh Salt.

65

Education level

Interpretation:

Most of the respondents who are purchasing Nirma Shudh Salt are 12th pass or graduate from different

area of the Ahmedabad city.

66

Income level

Interpretation:

Here in the different area of Ahmedabad the respondents who are purchasing salt are having income level

b/w 5000 to 10000.in some of the area below 5000 RS- income level are respondents who are purchasing

salt.

67

Profession :

Interpretation:

Most of the respondents are housewife and service people who are purchasing salt so company can target

them for their advertisement.

68

HYPOTHESIS CALCULATION

Ho: Preference towards salts and area are independent of each other.

H1: Preference towards salts and area are dependent of each other.

Where:

Fo= observed frequency

Fe= expected frequency for each cell

Fe=(frequency for the column)(frequency for the row)/n

69

Calculation

Observed Frequency

TATA NIRMA DANDI ANNAPURNA CAPT

C.

OTHERS total

MANINAGAR 14 9 4 6 3 0 36

RANIP 18 10 6 4 2 0 40

SATELLITE 17 7 3 5 2 0 34

SARASPUR 10 9 4 8 2 4 37

MEGHANINAGAR 11 7 8 5 3 3 37

NARODA 6 8 5 6 0 9 34

Total 76 50 30 34 12 16 218

Expected Frequency

TATA NIRMA DANDI ANNAPURNA CAPT C. OTHERS

MANINAGAR 12.55 8.25 4.9 5.61 1.98 2.64

RANIP 13.94 9.17 5.5 6.2 2.2 2.93

SATELLITE 11.85 7.7 4.67 5.32 1.87 2.49

SARASPUR 12.89 8.48 5.09 5.77 2.03 2.71

MEGHANINAGAR 12.94 8.48 5.09 5.77 2.03 2.71

NARODA 11.89 7.7 4.6 5.32 1.87 2.49

70

Fo Fe Fo-Fe (Fo-Fe)^2 [(Fo-Fe)^2]/Fe 14 12.55 1.45 2.1025 0.16753 18 13.94 4.06 16.4836 1.182468 17 11.85 5.15 26.5225 2.238186 10 12.89 -2.89 8.3521 0.647952 11 12.94 -1.94 3.7636 0.29085 6 11.89 -5.89 34.6921 2.917754 9 8.25 0.75 0.5625 0.068182

10 9.17 0.83 0.6889 0.075125 7 7.7 -0.7 0.49 0.063636 9 8.48 0.52 0.2704 0.031887 7 8.48 -1.48 2.1904 0.258302 8 7.7 0.3 0.09 0.011688 4 4.9 -0.9 0.81 0.165306 6 5.5 0.5 0.25 0.045455 3 4.67 -1.67 2.7889 0.597195 4 5.09 -1.09 1.1881 0.233418 8 5.09 2.91 8.4681 1.663674 5 4.6 0.4 0.16 0.034783 6 5.61 0.39 0.1521 0.027112 4 6.2 -2.2 4.84 0.780645 5 5.32 -0.32 0.1024 0.019248 8 5.77 2.23 4.9729 0.861854 5 5.77 -0.77 0.5929 0.102756 6 5.32 0.68 0.4624 0.086917 3 1.98 1.02 1.0404 0.525455 2 2.2 -0.2 0.04 0.018182 2 1.87 0.13 0.0169 0.009037 2 2.03 -0.03 0.0009 0.000443 3 2.03 0.97 0.9409 0.463498 0 1.87 -1.87 3.4969 1.87 0 2.64 -2.64 6.9696 2.64 0 2.93 -2.93 8.5849 2.93 0 2.49 -2.49 6.2001 2.49 4 2.71 1.29 1.6641 0.614059 3 2.71 0.29 0.0841 0.031033 9 2.49 6.51 42.3801 17.02012

χ2Cal=41.18375

71

χ2Cal = 41.18375

Degree of freedom=(R-1)*(C-1)

= (6-1)*(6-1)

=25

Confidence level = 95 %

Therefore χ2tab = 14.611

Now in this case χ2cal > χ2tab hence null hypothesis is rejected and alternative hypothesis is accepted.

Conclusion: Preference towards salts and area are dependent of each other.

72

FINDINGS

The survey has become the important tool for any company because this will give the clear picture of

where the company stands in the market and what amount of effort they have to put for the purpose of

becoming a market leader in their respective segment. Here, the effort is done to know the market

position of the Nirma Shudh Salt and what should they do to increase the standard of the product.

Following are some of the findings that are concluded from the survey.

1. Awareness about the iodized salt:

Almost 92% of respondents are aware about the benefits of the iodized Salt. People in developed

areas are purchasing the branded edible salt regularly but people of backward area or outskirts

area, though aware about the benefits of iodized edible salt, are not purchasing the branded salt

because of the price consideration. And according to the retailers also more and more people are

coming with the specific brand name and that is why i can say that the awareness about the

iodized salt with the specific brand name has been increased.

2. Awareness about the specific brand of edible salt:

While talking about the brand awareness of the edible salt, Tata has the advantage of oldest

existence in the edible salt market, which will make them the most successful Edible Salt Brand in

the market with 33% of Iodised salt market, which is followed by the Nirma Shudh Salt with 22%

of the Iodised salt market which shows that consumers are aware of Nirma Shudh Salt. Dandi and

Annapurna has also the advantage of brand awareness but the level of purchase by the customers

is very low as compared to Tata and Nirma.

3. Brand of edible salt used by the customers:

According to the retailers, Tata, Dandi, Nirma Shudh and local players are the main gainers of the

edible salt industry. Tata is being the market leader has the most influence on the market, which is

having 33% of market share. While the second position is gained by Nirma Shudh Salt with 22%

of market share. This is the brand which is having the advantage of good distribution network.

73

NIRMA Shudh Salt is the main competitor for the Tata. While talking about the Dandi which has

achieved a huge success because of the advertisement campaign made by them while Nirma

Shudh has been able to capture the market because of the price factor. Annapurna and captain

cook are the brands of HUL where captain cook has not done too much in these areas where as

Annapurna is preferred by the 15% of the respondents.

4. Repeat purchase of branded edible salt:

There are more than 69% of the people are using the same edible salt brand in their daily use.

Here also Tata has the advantage of brand loyal customers because the brand has the advantage of

long-term existence in the market. While talking about the Nirma Shudh Salt, there are 62% of the

respondents are using same salt always. The reason behind the use of edible salt regularly is the

saltiness, price and double refined salt in it. Generally the purchase frequency of the edible salt is

1 Month for 2 kg of the packets of the average family size of 5.

5. Features preferred in edible salt brand:

It has been observed from the survey that the most influential factor for selecting any brand of

edible salt is taste, price, free flow and brand name. Tata is the only brand that is purchase on its

brand name also because of the long-term existence in the market. While talking about the Nirma

Shudh Salt, along with the price, free flow and taste, double refined salt property is also plays an

important role in the purchase decision of the brand. As the company is trying to sell its product

according to the income level of customers, the price will play a major role.

6. Purchase decision maker and purchase outlet:

It has been observed that wife (34% of respondents) generally takes the purchase decision because

she is the person who handles the kitchen and care for the family. And the provision store (46% of

respondents) is the main outlet for purchasing the edible salt. So the company who wants to make

its presence in the market must advertise the product targeting at the elder women and care for her

family and must give some trade promotions to the retailers because they are the main influencer

for buying the edible salt.

74

7. Major Influencer of purchasing of edible salt:

Tata, Annapurna and Dandi are the companies, which are competitor of Nirma Shudh Salt . Their

advertisement are made in such a way that it has created a huge success, for the company as

Dandi has achieved a significant success in a very short span of time and Tata by giving

emotional advertisement campaign, created a great success for their company. While talking

about the major Influencer of the Nirma Shudh Salt, the television advertisement is playing the

major role. Almost 51% of the people are influenced by the advertisement. According to the

survey, the people who are watching the advertisement of Nirma Shudh Salt has found it Good to

Average. So the level of satisfaction with the brand advertisement is normal. The second position

is gained by the retailers who are making the decision of stocking of any product according to the

schemes given by the respective companies. Thus in two ways, Nirma can influence the

customers either by giving customers schemes that is right now given by the company or by the

trade promotion. Retailers are the key for success in this industry.

8. Distribution network:

All the companies that exist in the edible salt market have the advantage of effective distribution

network. Even the local players have also the same advantage. Tata and Nirma Shudh Salt are the

major players who have the advantage of the effective and most successful distribution network.

However, those companies, which are not able to supply the product on time, have the

disadvantage of loosing the market share. To be successful in the edible salt market, the

distribution network of plays a major role. While talking about the Nirma Shudh Salt, the

company has already established the effective distribution network for their other products like

Detergent, Soaps etc and the same distribution network will apply for the edible salt also. Thus

the company has the advantage over the other local players. When asked to the customers about

what to do at the time of non-availability of Nirma Shudh Salt, most of the reply was to change

the brand of the salt. Thus it has been observed with Nirma Shudh Salt that whenever there is a

shortage of Nirma Shudh Salt, people will switch over to the other brand that is not the case with

the brand Tata because of its brand loyal customers. Nirma has not been able to establish this kind

of customers yet.

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9. Educational & income level with the edible salt brand:

Talking about the educational as well as income level of the edible salt users, as the people are

becoming more educated and more income earner, the brand preference will switch towards the

national and quality brand. Thus the people with the lower income and less educational

background will switch towards the unbranded and loose salt and some extent towards the Nirma

Shudh Salt because of its less price. People with higher income and more income will generally

go for the products like Tata, Nirma Shudh Salt, Annapurna and Dandi. Thus the income as well

as the educational level has played a major role in the selection of the branded salt.

10. Perception of retailers towards the different edible salt brand:

It has been observed that the retailer is the main influencer for any brand of edible salt. Tata has

been the favorite brand for any retailers because of its highest market share and for its quality.

Nirma Shudh Salt has achieved the second position in the minds of retailers because of its highest

margin. Dandi is becoming the third major product for their portfolio because of its quick success

in a quick period of time. However, Annapurna has also done some good business in some

surveyed areas but cannot influence the retailers to store that brand. Local marketer has also a

huge success in the rural market because of its lowest price has also place in the retailers’ stock of

edible salt. While talking about the Nirma Shudh Salt, the retailers are maintaining the stock

because of the scheme they are providing to the retailers and to the customers and the highest

margin.

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SUGGESTIONS & RECOMMENDATIONS

Nirma Shudh Salt is doing a good job by providing the customers a quality product with lesser price, as it

is their policy to provide customers values for their money. But every company is lacking somewhere. So

following are some suggestions, which will play an important role for the company to become a

successful player in a competitive market.

Television advertisement targeting at the women taking care of her family has the best influence

on the market so try to promote that brand from Advertisement message only.

Price, Double refined salt, free flow and taste are the four major factor for the Nirma Shudh Salt

from which the company can able to influence the customers.

The level of saltiness must be reduced to some extent. It has been observed that women who are

using Nirma Shudh Salt, has the complain of saltiness.

Retailers are the main influencers for the purchase decision of edible salt. Thus try to provide as

many trade promotion schemes as possible And keep on with the scheme of highest margin, as it

will encourage them to sell more product of the company.

According to the retailers, those companies, which will give them the highest trade promotion

schemes, have the advantage from them. Thus more trade promotion more will be the selling of

the product.

Do not sell the salt at different price in different areas according to the income or educational

level of the customers, as it will create a question in the minds of the customers about the quality

of the product.

Try to maintain the distribution network as effective as it is now. Because people will buy only

that product which will be available in the market at the time of purchase.

The people with educational level of 10th pass to graduate and income level between Rs. 5000 to

Rs. 10,000 are the main target customers for the Nirma Shudh Salt.

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Provision store or nearby shop are the two main domains for the purchase of edible salt. Thus try

to make strategy by considering them in a very effective manner.

Fortune Salt of Adani, Saffola from Marico Industries, Surya Salt, Nature Fresh and different

unbranded players are the major threats to the company with the existing players like Tata, dandi,

Annapurna, Captain cook etc.

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BIBLIOGRAPHY

REPORTS:

• Annual report of the Nirma ltd.

• Salt Industry report 2008-09

WEBSITES:

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(2)sales industry,Retrieved JANUARY 17, 2010, from /www.salttradeindia.com: http://www.salttradeindia.com/?gclid=CP20wpCZn6ACFcxR6wod42CTa 

(3)  Retrieved february 19, 2010, from http://www.economywatch.com/business‐and‐economy/salt‐industry.html 

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(5) Retrieved march 10, 2010, from http://en.wikipedia.org/wiki/Salt salt industry. (n.d.). Retrieved february 21, 2010, from http://www.economywatch.com/business‐and‐economy/salt‐industry.html 

(6) salt industry. (n.d.). Retrieved march 10, 2010, from http://www.saltinstitute.org/Production‐industry/Salt‐industry 

(7) The Salt Industry Worldwide. (n.d.). Retrieved march 15, 2010, from http://www.cea‐life.com/minerals_health/salt_industry.htm 

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(8)Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha,(2009) marketing management:

Pearson Education Publication

(9)Rajiv Batra, John G. myers, David A. Aaker,(1998) marketing management: Prentice-hall of India

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