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The Nirma Story

…a dynamic phenomenon,

…a philosophy,

…a revolution… that changed our lives!

The Beginning….The Beginning….In 1969 Gujarati entrepreneur, Dr. Karsanbhai

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

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

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

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

Some Facts…Some Facts…Nirma is named after Nirupama

daughter of Dr. Karansanbhai Patel“Dudh si safedi Nirma se aye,

rangeen kapda bhi khil khil jaye”Jingle used since last 35years

Same radio spot has been used consistently since last 28years

Nirma is one of the largest selling single detergent brands in the world

A different pathA different path

Identified new markets.

Expanded markets where others failed

Achieved penetration where others felt consumers mind set could not be changed

Success PathSuccess Path

Value for money conceptsRural focusFlat, efficient, robust distribution network

Multi dimensional aggressive marketing and manufacturing strategy

Aggressive media strategy

ResultsResultsValue for money conceptWashing habits changedWidespread conversion from oil soap and soda ash to detergent powder

Size of detergent market in no time multiplied manifold

Single product brand

Present Scenario Present Scenario

8 manufacturing locations.Amongst top 10 Indian Brands.Nation wide Distribution reach.

o400 Distributorso2000000 Retailerso40 Depots

Strong human resource base consisting of 14000 employees and 500 professionals.

RecognitionRecognition This brand had been ranked as the “Most widely

distributed detergent powder brand in India” as per All India Census of Retail Outlets carried out in 435 urban towns by the AIMS (Asian Information Marketing & Social) Research agency [Brand Equity - The Economic Times, March 11, 1997]. 

As per the ORG-MARG Rural Consumer Panel [December 1998] survey, Nirma brand has been ranked as highest in terms of penetration in washing powder category [BT Rural Market Watch, Business Today, June 22, 1999].

9th among Top FMCG brands of India ( A& M –MODE-2002)

ProductsProductsDetergents: Spray dried powder,

Compact dry mixed, CakesToilet Soaps: Beauty Soaps ,

Carbolic Soaps, Premium SoapsPackaged Foods: Iodized SaltIndustrial Products: LAB, Glycerin,

AOS, Sulfuric Acid, Sodium Silicate, Soda Ash, Salt

Fertilizers: Single Super Phosphate

Marketing StrategyMarketing StrategyProduct Positioning: Nirma found its place

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

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

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

Financial ReportFinancial ReportPARTICULARS 2009-10 ( Cr.) 2008-09 (Cr.)

SALES 3117.95 3030.17

PBT 276.32 118.33

PAT 237.94 93.43

* CURRENT SHARE PRICE - 219.15

Segmentation of Detergent Segmentation of Detergent market in Indiamarket in India

Segmentation Of Detergent

Powder Market

Premium

Ariel, Surf Excel

Mid – priced

Surf Excel Blue, Tide, Henko

Mass Market

Nirma, Wheel and Fena

Overview of Detergent Overview of Detergent IndustryIndustryTotal detergent Market value- 13000 cr.Market Share

*Others – Henkel, Nirma and Fena

*Source: DNA 9th Sep 2010

4 A’S of Rural 4 A’S of Rural MarketingMarketing

AFFORDABILITYAFFORDABILITY Offered good quality product at unbeatable low prices

Price at almost one third to that of competitor brand of resulting into instant trail by the consumers

Cleansing power far superior to that of slabs of cheap cleaning soaps

Breaking cost Breaking cost barrierbarrierCost competitiveness

◦HLL’s surf was highly priced in India during 1970’s

◦Yellow powder was mixed manually in workshops to get excise concessions.

◦Managed with a workforce of 10,000 and 200 managers thereby trying to break the cost barrier.

AVAILIBILITY AVAILIBILITY 350 strong sales force, a distributor strength

of 400 and a retail reach of over 1 million outlets

Supply chain management-

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

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

◦Railway for bulk movements

StrategyStrategy

Backward Integration◦After the withdrawal of the excise commission

in 1982 Patel got into backward integration.◦Started manufacturing Sulphuric acid, Alfa

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

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

Sustainable advantage◦Low cost labor◦Superior processes◦Mindset of cost-conscious consumer

Marketing & DistributionMarketing & Distribution

AWARNESSAWARNESS

Media MixMedia MixOBJECTIVE• Reach Geographical dispersed buyers

METHOD USED• Advertisement• Radio• Wall painting• Vans/Trains

• Direct and Interactive marketing• Personal Selling• Expert Channel –Changing Washing Habits.• Product Demonstration

• Sales promotion• Prize Draw• Introduce bucket scheme to promote product

hamper• Money back guarantee promotion scheme

Promotion Promotion Nirma believes in advertising only after they

have launched a product in place.

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

In 1982 we witnessed the birth of the first film for the brand, with the effervescent jingle. Its simple and catchy –

“Dudh si safedi Nirma se aye, rangeen kapda bhi khil khil

jaye”

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

BrandingBrandingNirma followed its original marketing and pricing

strategies in both economy and premium segment.Launched product categories like premium

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

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

Manufactured soaps with right scents keeping prices low.

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

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

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

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

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

In 2009 Nirma wakes up and decides to undergo a personality transplant. A whopping Rs1.5 crore is spent on that thought.

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

It did not use the iconic Nirma jingle.

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

ACCEPTABILITYACCEPTABILITY

Better quality productsCheaper in priceEasy availabilityValue for money Need fulfilled for lower and middle lower class

STRENGTHS WEAKNESS

OPPORTUNITIES THREATS

Losing BusinessLosing Business…..…..

Nirma suffers from the inability to innovate in the product categories

With rising incomes, consumers are now shifting from economy brands to aspirational purchases.

The rivals have products across all price points to mitigate the inputs cost effects while nirma is available in only one plank-Value for money.

SuggestionsSuggestions

Introduction of family packIntroduction of liquid detergentAttractive packaging Incentives to distributors

Any Questions….Any Questions….