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SUBMITTED BY: SUBMITTED TO:

PROF. PINA VYAS KHATSURIYA KARTIK M.

KOTIA AJAY B.

IN THE PARTIAL FULLFILMENT OF MBACOURSE

S.K.PATEL INSTITUTE OF MANAGEMENT & COMPUTER STUDIES

GANDHINAGAR.

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PREFACE

Practical study plays a vital role in the field of education. Howmanagement principles are implemented in business can only be

known through practical study, students can be very well aware

about industrial environment like problem, opportunities, different

situations etc. this helps the student for better understanding and

also gives them a chance to show their skills and ability.

This report throws lights to one of the key sector of human health.Edible Salt Industry, which has in the limelight due to its rapid

development towards the iodized progrmme by the World Health

Organization and the Government of India and emergence as a major

contributor to the export of the country, which will, leads to the

economic progress of the country.

The report seems in such a manner that can give comprehensive andrelevant aspect bout the edible salt industry and especially with

respect to the Nirma Shudh Salt, which is racing towards capturing

the salt market of the country. In the first phase the current scenario

of the edible salt industry, then it reflects on what are the retailers as

well as the consumers of the Nirma Shudh Salt except from the

company through the medium of customer as well as retailer survey.

We hope that the report is fulfilling all the requirements as per the

rules and regulations of the University as well as the Company

Officials.

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ACKNOWLEDGEMENT

We, the students of S.K.Patel Institute of Management & Computer

Studies are extremely thankful to our institute for giving us an

opportunity to undertake this Grand Project.

We are very much thankful to Mr. Bhargav (HR Manager) ofNirma

Industries Ltd. for providing us the permission to undergo a grand

project under their supervision. We are also very much thankful to

Mr. Shmyak shah (Marketing Executive) at Nirma Consumer Care

Ltd., for patiently responding to our various queries and for his

valuable guidance. We are also thankful to Director S.C.Chinnam

Reddy, Prof. S.K.Mantrala (CO-ORDINATOR) and Prof. Pina Vyas for

providing us the helpful support for completing the report in a given

schedule. Thanks for their benevolent support and kind attention.

Their valuable guidance at each and every stage of the project

always gave a Phillip to our enthusiasm.

Last but not the least we express our gratitude to all people who are

directly or indirectly involved in the preparation of this report.

KHATSURIYA KARTIK M.

KOTIA AJAY B.

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EXECUTIVE SUMMARY

Today the Edible Salt market is growing very rapidly because of the

Government regulations of iodized salt. The iodized salt is now

becoming the first requirement of the people. Salt is a commodity

that is consumed by richest to rich and poorest to the poor. There are

various edible salt manufactures in India and who are fighting hard to

remain in the competitive market.

Basically the aim of making the report is to find the satisfaction level

of consumers as well as the retailers of the Nirma Shudh Salt and to

know the Edible Salt Industry as a whole. The sample size of the

household was around 550 and the retailers were about 250 taken for

the purpose of the survey that was conducted at Bhavnagar, Rajkot,

Porbander, Kalol, Gandhinagar & Satellite, Bapunagar, Naroda, Vadaj,

Vejalpur, and Khanpur areas of Ahmedabad for the period of 3

months.

Basically our study is based on market research of customers as well

as retailers that are using or selling Edible Salt brands. Our main

focus was to know about the market of Nirma Shudh Salt and for that

we have asked about the perception of the retailers as well as of the

consumers regarding the factors like margin, price, trade &

consumers promotion requirements, distribution network,

advertisement, brand awareness etc.

The Edible Salt Industry is facing a stiff competition amongst the

existing players. There are many players existing in the industry like

Tata salt from Tata Chemicals, Nirma Shudh salt from Nirma

Industries, Annapurna salt and Captain Cook from HLL, Dandi salt

from Kunvar Ajay Industries, Nature Fresh salt from Cargill Industries,

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Saffola salt from Marico Industries and the local unbranded players

are the major threats to the industry.

We have found that the Tata Salt is the market leader in the Edible

Salt Industry. The Dandi, Nirma Shudh Salt occupies the second

position. The consumers of the Nirma Shudh Salt are not too much

happy with the quality of the product according to its price prevailing

in the market. Consumers are not finding any difficulty with the

availability of salt. Retailers are also satisfied with the margin of the

Nirma Shudh Salt. Retailers, however, convince that the level of

brand awareness is not too high. The overall response for theperception regarding the Nirma Shudh Salt is average. However the

company has the advantage of effective television advertisement

with retailers pushing the brand in a very effective manner.

Nirma Shudh Salt, the company that has the advantage of effective

distribution network, will find the road very tough to reach to the pick

of the industry as tata has adopted the way of emotional campaign toattract the customers. The company is also not been able to exist in

the whole country is a question. The company, to become a

successful player, must improve its brand image for its quality in the

mind of the customers. The company also wants to stabilize its price

throughout its areas of existence.

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INDEX

SR.NO.

CONTENTS PAGE

NO.

01 RESEARCH METHODOLOGY 01

02 LIMITATIONS OF THE STUDY 07

03 INTRODUCTION TO THE SALT INDUSTRY 09

04 INTRODUCTION TO THE EDIBLE SALT

INDUSTRY

17

05 SALTS SWEET SUCCESS 19

06 PEST ANALYSIS OF INDUSTRY 23

07 FIVE FORCES ANALYSIS OF INDUSTRY 28

08 COMPETITIVE ANALYSIS 32

09 PROMOTIONAL CAMPAIGN IN EDIBLE SALT

INDUSTRY

39

10 NIRMA INDUSTRIES LTD. 43

11 SWOT ANALYSIS OF NIRMA SHUDH SALT 56

12 A SURVEY OF CONSUMERS OF EDIBLE SALT 59

13 A SURVEY OF RETAILERS OF EDIBLE SALT 99

14 FINDINGS 121

15 SUGGESTIONS & RECOMMONDATIONS 127

16 APPENDIX 130

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17 BIBLIOGRAPHY 134

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 few

months ago. 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 salt as well as the satisfaction level

with the retailers regarding the Nirma Shudh Salt and what are the

problems they are facing regarding the product.

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OBJECTIVE OF THE STUDY

To study the Consumer Preference for Edible Salt at Nirma

Consumer Care Limited with special reference to City like

Ahmedabad, Bhavnagar, Gandhinagar, Kalol, Porbandar &

Rajkot.

To study the awareness about Nirma Shudh Salt which has

relaunched few months ago.

To know the brand awareness of Edible salt in those cities 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 retailer satisfaction criteria as well as the brand

preference given by them for increasing the sale of a particular

brand of edible salt.

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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 we have 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 we

are 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 we will give sufficient thought

for framing research questions and deciding the type of data to be

collected.

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DATA COLLECTION METHOD

PRIMARY DATA:

Using two methods, the data has been collected:

Observation:

The purpose of observation was to have a look on the actual condition

in which of the salt and which brand of salt are used by consumer.

With the help of Retailers, we have seen the consumers observation

as actually, how much and which brand of salt they are using at

present? What is the purchasing pattern of consumer? etc.

We have also try to know about the retailers preference through their

way of behaviour regarding the particular brand of product and we

have tried to know how much are they satisfied with the selling of a

particular brand of salt.

Questionnaire method:

The questionnaire is divided into two methods that is Structured and

Non-structured Questionnaire Method. We 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. We

have done the pilot survey of 20 customers for checking out validity

of our questionnaire and then we have finalized our questionnaire for

the survey purpose.

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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. We have conducted a survey on the

consumer and retailers to know the preference and satisfaction level

for Edible Salt users (at Nirma Consumer Care Limited) with special

reference to five cities of Gujarat. These specifications are as follows:

Element: Buyer as well as the Seller of Edible Salt.

Sampling unit: Household & retailers.

Extent: Ahmedabad, Bhavnagar, Rajkot, Porbandar, Kalol and

Gandhinagar.

Time: Three months

Specifying the sampling method:

It indicates how the sample units are selected. We have selected

Probability Sampling and Random Sampling Method. The project lastfor about 4 and a half months and cover almost five major cities of

Gujarat.

Sample size decision:

For using the stratified sampling method, we have divided the cities

according to the Zone wise. And the Ahmedabad city is covered with

many areas but here we have been guided to choose only six areas

like Satellite, Vadaj, Vejalpur, Khanpur, Bapunagar and Naroda. Forthe other cities, we have selected the areas, which are almost the

true representative of the whole city.

Selecting the sample:

A good deal of fieldwork is involved in the actual selection of the

sampling elements. We have tried very hard to find out the correct

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representative of the city that will give us the clear indication of the

consumer as well as the retailer preference.

LIMITATIONS OF THE STUDY

The limitations of the study carried out are as follow:

This study is limited to five cities of Gujarat only that are

Ahmedabad, Bhavnagar, Kalol, Gandhinagar, Porbandar and

Rajkot.

Due to limited period of time and unavoidable circumstances,

we have considered the survey with only 540 households and

250 Retailers for knowing about consumer preference and

retailers preference about the Edible Salt.

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.

It may be possible that the information collected from both

retailers as well as the consumers may not match, as their

answer may be biased.

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INTRODUCTION

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 forthe 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. 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%

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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.

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 during 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

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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.

SALT WORKS & ACREAGE UNDER SALT PRODUCTION

There are about 9571 salt works in 2001, mostly in small-scale sector

engaged in the production of salt. The total area under salt

production is about 5 lakh Acres. The salt manufacturing activities

provide direct employment to about one-lakh persons per day.

Year Category-I

(with area

above 100

acres)

Category-ii

(with area

above 10 &

below 100

acres)

Category-iii

(co-op. Societies

- per member

holdings up to 10

acres)

Category-

iv

(with area

below 10

acres)

Total

1997 380393 24543 37162 32329 4744271998 388794 24506 37298 32572 4831701999 399521 23602 36247 33123 4924932000 400298 23632 35097 36777 4958042001 400696 23766 34172 36749 495383

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

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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, andthe 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 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 videMinistry of Industrys Notification dated 09.09.1981 still continue to

be in force.

EXPORTS

Despite being among the largest producers of salt in the world, Indiahas 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

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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.

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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.

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

Commissioners Office has been declared as the Nodal Agency for the

creation of adequate capacity for the production, distribution andquality 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.

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INTRODUCTION

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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 requiresstandardization 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 Annapurnas market share touched

34.46 per cent. DCW Home Products Ltds 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,

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1.37 per cent and 0.14 per cent respectively. In March 2002, the

market share of Tata Salt touched 39 per cent, while Annapurnas

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 enhancethe 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 1983, DCW launched its brand in

1991 and Hindustan LeversAnnapurna 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.

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SALT'S SWEET SUCCESS WHY 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

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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, positionedas 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 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 amountsto 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 saltmarket 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

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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.

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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.

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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

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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 Centers 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.

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.

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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.

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The salt is being consumed by richest to the rich and poorest to

the poor, so the Government maintains the affordability of the

price.

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 Plantsare 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.

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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.

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.

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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 theover 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.

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

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tablet form. Thus there is a substitute for the packaging but not for

the commodity itself.

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.

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 thatmeans 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 ofthe 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.

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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 positioned on purity platform and

Annapurna is positioned on the health benefit impact of the iodinecontent 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 saltmanufacturing 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 Levers 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 FlowSalt. Nirma has the advantage of a well-established distribution

network of grocery stores (where its soap anddetergent 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

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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.

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

tired 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 us 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

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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 Indias 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 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

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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 "goodfor 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 whos 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

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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 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 Levers 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. Thecompany 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 Cookbrand

is inevitable. Also problems faced post acquisition and inadequate

marketing support has somewhat tarnished the equity of this once

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extremely popular brand. But given that the brand even today enjoys

a strong recall, it is unlikely that Captain Cookwill die a silent death.

A more likely possibility is that HLL will use Captain Cookas a flanking

brand, positioning it in a different consumer price segment, as has

been HLLs 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

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

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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,

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Tara, Haathi, Sagar, Ambica, Shagun, Umiya etc. they are major

threat to the edible salt industry, which must be overcome.

PROMOTIONAL CAMPAIGN INEDIBLE SALT INDUSTRY

A Tata company manufactured Tata Salt, Indias first iodized salt. The

first competitive challenge came in the early 1990s with the launch of

Captain Cook. Positioned as a freeflowing salt, it helped create

awareness about brands in the salt segment. Tata Chemicals

responded by releasing ads to counter Captain Cooks claims. Asmore consumers moved from non-branded or local products to the

national brands, Tata Salts 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 inthe 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

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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 brandedsalt 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

1990s is quite basic to the category by now. Marketers have started

àdding value' and hard selling ingredients in the branded

commodities market.

While Tata salt changed its positioning to `vacuum evaporated ' from

ìodized salt' a few months ago, the product ingredient ìodine K15' is

the focal point of communication for Annapurna salt. Marico

Industries 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

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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.

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INTRODUCTION

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."

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.

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EVOLUTION

Shri Karshanbhai, from a chemist with Gujarat Government'sdepartment 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-lightingactivity 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.

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

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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 servicemanager 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.

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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 powder market share in the western region anddislodged 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. Theyavoided 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 thestory 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

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anywhere in the world does one company sell much detergent less

than one brand name.

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

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Nirma rose

Nima herbal

Nirma herblina

OTHER PRODUCTS:

Nirma beauty shampoo

Nirma shikakai

Nirma toothpaste

Nirma shudh iodized free flow salt

INDUSTRIAL PRODUCTS:

Sulphuric acid

Linear alkyl benzene

Glycerin

Fatty acids

Soda ash

MANUFACTUIRNG PLANTS:

Mehsana Gujarat

Ahmedabad Gujarat

Bhavnagar Gujarat

Rajkot Gujarat

Dhar Madhay Pradesh

Kanpur Uttar Pradesh

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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.

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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:

L A B O R

P R O D U

P O T E N T

S U R V

R E S E A R

2. MIS:

In this step they collect details about competitors

product.

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6 . S E G

5 . D

4 . S U R V E Y ( T H E Y S U R V E Y T

3 . M I S D E P A R T M E N

2 . N E W P R O D U C T L

1 . A C C O R D I N G T O T H E I R C

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.

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Nirmas 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.

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

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WHOLESELLER

CONSUMERS

The other channel of distribution is as follows:

COMPANY

STOCKPOINT

DISTRIBUTORS

RETAILERS\WHOLESALER

CONSUMER

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

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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.

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.

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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.

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AWARENESS ABOUT THE BENEFITS OF THE IODIZED EDIBLE

SALT

There are people who will consider the value of iodine in the edible

first because iodine is a necessary requirement of a body and it will

also helpful in prevailing some daisies. 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.

CITY RESPONDENT

PERCENTAGE

YES NO

BHAVNAGAR 108 (90) 83.33% (18) 16.67%PORBANDAR 50 (44) 86% (06) 14%

GANDHINAGAR 50 (45) 90% (05) 10%

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RAJKOT 100 (92) 92% (08) 8%SATELLITE 29 (27) 93.10% (02) 9.90%BAPUNAGAR 30 (22) 73.33% (08) 26.67%KHANPUR 30 (20) 66.67% (10) 33.33%

NARODA 32 (28) 87.50% (04) 12.50%VEJALPUR 30 (26) 86.66% (04) 13.34%VADAJ 41 (27) 65.85% (14) 34.15%KALOL 40 (24) 60% (16) 40%

TOTAL 540 (449) 83.15% (91) 16.85%

AWARENESS OF IODIZED SALT

16.85%

83.15%

YES

NO

Thus the overall analysis will suggest that there is 83.15% (449)

customers of the edible salt industry are aware about benefits of the

iodized salt while 16.85% (91) customers are not aware about the

benefits about the benefits of the iodized salt. So we can comment

that the awareness regarding the use of iodized salt is more than

enough, which will benefit the overall health safety of customers.

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BRANDS KNOWN BY THE EDIBLE SALT USERS

(In Percentage Only)

Aba

d

Rajkot Bnaga

r

Pbande

r

Kalol Ggar

TATA 30 37 31 30 29 29NIRMA

SHUDH

22 15 19 25 20 20

ANN. 10 13 10 12 06 12

DANDI 25 26 24 23 24 21CAPTAIN

COOK

03 04 04 05 NIL 07

SAFFOLA 01 03 01 NIL NIL 01NATURE

FRESH

01 NIL NIL NIL NIL NIL

LOCAL 08 02 11 05 21 10

Tata is leading the way by having the highest percentage of brand

awareness. Both Dandi & Nirma Shudh Salt captures the second

position. That means that people are aware of the Nirma Shudh Salt

but they are not still trying to purchase this brand. People are still

wondering about whether to purchase the Nirma Salt or not. While

Annapurna has not been able to influence the market of Gujarat. The

local players are also playing a major role in the unbranded segment.

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BRAND CHOICE OF THE EDIBLE SALT USERS

There are many brands of edible salt available in the market in which

the there are local, as well as national players exist. We have

analyzed the brand choice of the customers and the data we havecollected information every city wise, which is as follows:

PORBANDER (50)BRAND NAME PERCENTAGETATA (17) 34%DANDI (02) 04%

NIRMA SHUDH (12) 24%ANNAPURNA (07) 14%CAPTAIN COOK (05) 10%LAXMI (03) 06%TIPTOP (04) 08%

BHAVNAGAR (108)BRAND NAME PERCENTAGETATA (59) 54.65%DANDI (09) 08.33%NIRMA SHUDH (14) 12.96%ANNAPURNA (03) 00.78%CENTRAL SALT (04) 03.70%SAGAR (18) 16.66%NATURE FRESH (01) 00.92%

RAJKOT (100)

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BRAND NAME PERCENTAGE

TATA (65) 65%DANDI (11) 11%NIRMA SHUDH (08) 08%

ANNAPURNA (03) 03%SAFFOLA (03) 03%TAJA (02) 02%LOOSE SALT (08) 08%

GANDHINAGAR (50)BRAND NAME PERCENTAGE

AMBICA (06) 12%ANNAPURNA (02) 04%CAPTAIN COOK (01) 02%

DANDI (04) 08%HARISH (01) 02%NAVJIVAN (02) 04%SAFFOLA (01) 02%NIRMA SHUDH (07) 14%TATA (26) 52%

KALOL (40)BRAND NAME PERCENTAGE

AMBICA (07) 17.50%ANNAPURNA (01) 02.50%HARISH (17) 42.50%NAVJIVAN (01) 02.50%NIRMA SHUDH (05) 12.50%TATA (09) 22.50%

AHMEDABAD (192)

BRAND

NAME

AREA NAMESatellite Bnagar Khanpur Naroda Vadaj Vejalpur

DANDI (03)

10.34%

(02)

06.67%

(02)

06.67%

(03)

09.38%

(04)

09.75%

(02)

06.66%KAMAL NIL NIL NIL NIL NIL (04)

13.36%NIRMA

SHUDH

(03)

10.34%

(08)

26.66%

(07)

23.33%

(07)

21.87%

(13)

31.71%

(11)

36.66%TARA NIL (06)

20%

(03)

10%

NIL NIL NIL

TATA (17) (12) (10) (16) (08) (11)

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58.62% 40% 33.34% 50% 19.51% 36.66%UMIYA NIL (02)

06.67%

(01)

03.33%

NIL NIL NIL

LOOSE

SALT

(02)

06.91%

NIL (07)

23.33%

(04)

12.50%

(14)

34.15%

NIL

ANNA. (04)

13.79%

NIL NIL (02)

06.25%

(02)

04.88%

(02)

06.66%

From the above analysis, we can suggest that there is a good market

NIRMASHUDH [ pancholi chirag ]

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