nirama shadhu salt grand project report
TRANSCRIPT
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A
GRAND PROJECT REPORT
ON
Study of Criteria for the Purchase of Edible Salt with special
reference to Nirma Shudh Salt"A grand Project report submitted in Partial Fulfillment of award of PGDM Degree
PROJECT GUIDE:
PROF. ANIRUDH TAMBE
SUBMITTED BY:
YATIN ROKAD
PRINCE DUDHATRA
SUBMITTED TO:
Post Graduate Diploma in Management
(Two Year Full Time Residential Programme Recognized by
AICTE, MHRD, New Delhi)
PARUL INSTITUTE OF MANAGEMENT
VADODARA
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AcknowledgementMotivation and co-operation are the main two pillars on which the success of any works relies. So
first of all I would like to thank my project guide Prof. ANIRUDH TAMBE (faculty of Marketing
Manageent) who made me aware about the project and motivated me to work on the guideline of this
unique, new and knowledge based project. He had guided me at each and every stage of the project. And
enthusiastically involve in every aspects of the project. Overall I am highly indebted to him for all theknowledge, guidance and motivation that he has provided me throughout my project.
Every person wants to prove himself in this fast, dynamic and cut-throat competitive world.
When he/she gets an opportunity to do so then he or she will find that success is very near to him/her. So
I would like to acknowledge my beloved Director Prof. Sameer Rohadiya who provides lots of motivation
to got best way to present myself.
I would like thankful to Prof. Ashiya Shekh, Prof. Kinjal Palvankar, Prof.Sachin, and Prof.Ashish
Bhatt for providing all the necessary support from their side. Without their continuous guidance and
support, it would have been difficult for me to complete the project on time and in such a successfulmanner.
Lastly I would like to thank my parents, friends and well wishers who encouraged me to do this
research work and all those who contributed directly or indirectly in completing this project to whom I am
obligated to.
Thank you all
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Declaration
We undersigned Dudhatra Prince B and Rokad Yatin T. Students of PGDM, hereby declare
that the project work presented in this report is our own work and has been carried out under the guidance
and supervision ofProf. Anirudh Tambe of Parul Institute of Management, Baroda.
This report has not been previously submitted to any other college or institution for any other
purpose.
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Executive Summary
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I N D E X
NO Content Page No.
1 RESEARCH METHODOLOGY
2 INTRODUCTION TO THE SALT INDUSTRY
3EDIBLE IODISED SALT
4PEST ANALYSIS OF INDUSTRY
5FIVE FORCES ANALYSIS OF INDUSTRY
6COMPETITIVE ANALYSIS
7PROMOTIONAL CAMPAIGN IN EDIBLE SALT INDUSTRY
8NIRMA INDUSTRIES LIMITED
9SWOT ANALYSIS OF NIRMA SHUDH SALT
10 DATTA ANALYSIS
11HYPOTHESIS
12FINDINGS
13 SUGGESTIONS & RECOMMONDATIONS
14 BIBLIOGRAPHY
15 APPENDIX
16 LIST OF THE GRAPHS
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LIST OF THE GRAPHS
No Content Page NO
1 USER OF THE IODISED SALT
2 USERS IN AHMEDABAD
3 DIFFERENT BRANDS OF SALT TO AREA
4 RANKING PREFERENCE
5 AVERAGE MEAN
6 USERS OF SAME SALT BRAND
7 FREQUENCY OF PURCHASE
8 NUMBER OF 1 KG PACKETS REQUIRED FOR 1 MONTH
9 PURCHASE DECISION MAKER FROM WHERE YOU
10 PURCHASE SALT USER OF NIRMA SHUDH SALT
11 RANKING PREFERENCE FOR NIRMA SHUDH SALT
12 PRICE OF NIRM SHUDH SALT
13 INFLUENCER OF PURCHASING NIRMA SHUDH SALT
14 MEDIA USED
15 HAD RESPONDENTS SEEN TELEVISIONADVERTISEMENT?
16 AVAILABILITY DIFFICULTY
17 DO YOU LIKE PACKAGING
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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.
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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 Ahmadabad and to illicit theConsumer opinion about pr ice, 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 o f purchase of edible salt
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RESEARCH DESIGN
A research design is the specification o f 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 fro m which sources and from which producer of this competitive environment. Generally,
there are basic three types of research design, Exploratory, descriptive and Casual research. HereResearcher has taken Descriptive Research Design and the reason behind it is as follows: TheDescriptive 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 o r deter mines the relationship between
two or mo re variables. The objective of the study will answer who, what, when, where, and how of thesubject 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 o n the actual conditions of which brand of salt are
used byconsumer. With the help o f Retailers, Researcher has seen the consumers observation as actually,how much and which brand of salt they are using at present? What is the purchasing pattern o f consumer?
Questionnaire method:
The questionnaire is divided into two methods that is Structured and Non-structured Questionnaire
Method. Researchers have used the Structured-No n- Disguised Questionnaire that is the part of a
Structured Questionnaire. In that Method, the listing of question is a pre-arranged order and object inquiryis revealed to the respondent. Researchers have done the pilot survey of 20 customers for checking outvalidity of our questionnaire and then Researcher has finalized our questionnaire for the survey purpose.
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2. SECONDARY DATA:
Someone already collects these data and it is available fo r 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
SAM PLING 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 o f Element, Sampling extent and time. I have conducted a survey on theconsumer toknow the preference and satisfaction level for Edible Salt user s (especially Nirma Shudh salt)withspecial reference to different areas of Ahmadabad. These specifications are as follows:
Element: Buyer of Edible Salt. Sampling Size: 250 Ho use 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 Ahmadabad city is covered with many areas which are representative of the Ahmadabad as a Whole.I have chosen areas like Maninagar, Satellite, Vadaj, Saraspur, Meghaninagar, and Bapunagarand Naroda.
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Hypothesis:
A chi- square test for independence has been conducted for knowing the relation between the area and
the
Preference to wards salts.
Ho: Preference to wards salts and area are independent of each other.
H1: Preference to wards salts and area are dependent of each other.
LIMITATIONS OF THE STUDY
The limitations o f the study carried out are as follow:
This study is limited to different areas of Ahmadabad I have considered the survey with only 250 households for knowing about consumer
preference about the Edible Salt in Ahmadabad.
The accuracy o f the project and conclusion is totally dependent on the data collected andanalyzed.
The sample size is too small to predict the future growth of the edible salt industry.
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SALT INDUSTRY
Introduction
India is the third largest salt producing country in the world (after the US and China) with anaverage 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 o f salt is exported every year. Sea salt constitutes about 70% o f the
total salt production in the country. Salt manufacturing activities are carried out in the coastal states of
Gujarat,TamilNadu, Andhra Pradesh, Maharashtra, Karnataka, Orissa, West Bengal Goa and hinter landState 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 o f 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 lakes acres. The salt manufacturing activities provide direct
employment to about one-lake persons 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 productioncenters. The remaining quantity moves by road and waterway.
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Iodized Salt
With a view to ensure universal access of iodized 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 iodization capacity, its distribution and quality monitoring at
production centers, under NIDDCP. Salt Department has granted permission to more than 878 saltiodization units with an annual
Installed capacity of 112 lakh tones so far.
Exports
Export of common salt and iodized 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 first
time, exported 32,500 tons of common salt to the US during December 2002, creating a history of sorts.
Liberalization 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
reorganized.
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 perannum, 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.
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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 SALTPROPERTIES 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 colorless 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 containingover 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 infusorians.
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.
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.
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Salt is fairly hard. There is no standard unit fixed for hardness. Geologists, however, compare the
hardness of minerals by a comparative table (Mohs 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 upreadily 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 flavor 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 Iodized by infusion of minute doses of potassium iodide
about .02% as prophylaxis for Goitre Similarly, it is medicated with phosphates or other ingredients toregulate 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.
disfavor. 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.
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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 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 Industrys Notification dated 09.09.1981 still continue to
be in force.
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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 SmbharSalts-- 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
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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 and quality monitoring of
iodized salt at the production centers under the National Iodine Deficiency Control Programmed (NIDDCP).
The Salt Department has registered more than 940 units with annual installed capacity of 147 lakh tones.
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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. Anindividual'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 Unilever 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
Annapurnasmarket 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 andNatural Fresh hadmarket 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 Annapurnasmarket 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 Cookis 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 Levers 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 Safola 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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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 2000-0 1 - 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 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 tokitchen 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.
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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. Of course, distribution muscle is key. Tata Salt penetratessemi-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 portfolioas 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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P E S T A N A L Y S I S O F I N D U S T R Y
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 inthe edible salt segment.
It is when a legion of 70 million goiter-affected people stand as a pointer to the magnitude of iodinedeficiency 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. Itcontrols 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 WorldHealth Organization.
The Central Government also supervises equitable distribution, monitors quality and prices, ensuresmaintenance 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 andmonitoring development and the labour welfare schemes. And if the issue is one of loss ofemployment 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 industryform VAT that will be implemented from 1st of May.
The Centers recent decision to impose anti-dumping duties on soda ash imports from China hasbeen 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.
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ECONOMICAL FACTOR
The U.S. is the world's largest salt producer as well as the largest consumer. The U.S. salt industryearns 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 thatthe 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 5million 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 by2005; 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 marketwith 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 firmare the major threats to the market leader.
SOCIOCULTURAL FACTORS
Iodine deficiency is the single most important cause of preventable brain damage and mentalretardation, most of the damage occurring before birth. It also significantly raises the risk ofstillbirth 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 haslaunched 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 Governmentmaintains the affordability of the price.
Nirma Shudh Salt is providing the edible salt with best quality at lower cost to provide customer avalue for their money.
Dabur and Saffola have launched low sodium salt for the health conscious people, which is for thebetter living of the people.
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TECHNOLOGICAL FACTORS
National Research Development Corporation, Government of India Enterprise, is a premiertechnology 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 ShudhSalt 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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F I V E - F O R C E S A N A L Y S I S O F I N D U S T R Y
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 thestandard 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.
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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.
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5) COMPETITIVE RIVELRYTata 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 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 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 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, thecompany 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.
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C O M P E T I T I V E A N A L Y S I S
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 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 theDesh 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.
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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 ispartly 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 beenintrospecting 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 Saffolaconscious 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. 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 withthe 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 Cookin the staple
food categories of salt and atta. With both Captain Cookas 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 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.
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KUN VAR 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 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 logisticsmanagement, 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.
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P R O M O T I O N A L C A M P A I G N I N E D I B L E S A L T I N D U S T R Y
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 CaptainCooks claims. As more 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 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 twovariants 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
`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 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 contentionbetween 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
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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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N I R M A I N D U S T R Y
INTRODUCTION
Nirma is the Rs.17 bilion 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."
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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 maximize 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 whatconsumer 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.
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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 bepromptly 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 hisoffice 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 paidof 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
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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 fromtheir 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.
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PRODUCT L I S T
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 clea
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
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INDUSTRIAL PRODUCTS:
Sulphuric acid Linear alkyl benzene Glycerin Fatty acids Soda ash
MANUFACTUIRNG PLANTS:
Mehsana Gujarat Ahmadabad Gujarat Bhavnagar Gujarat Rajkot Gujarat Dhar Gujarat Kanpur Gujarat
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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.
M A R K E T I N G S T R A T E G Y
"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.
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M A R K E T S E G M E N T A T I O N
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 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
P R I C I N G P O L I C I E S
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:
MISFirst 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.
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. Co mpany wants to maximize its profit then unit established higher policy. The co mpany wants to cover
the larger part of the market and for that the company may establish negligible pro fit policies fo r its different
products.
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CHANNEL OF DISTRIBUTION
The channel o f distributions will p lay an important role for the company that are operating theirbusiness in the edible salt market because people will buy only that product which will be available at thepurchase outlet. The level of brand switching is high here. Thus channel of distribution will play animportant role for effective reach to the end consumer.
FACTORY
AGENTS
DEPOTS
RETAILERS
WHOLESELLER
CONSUMERS
The other channel of distribution is as follows:
COMPANY
STOCKPOINT
DISTRIB UTORS
RETAILERS\WHOLESALER
CONSUMER
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SALES P R O M O T I O N
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 PROMOTIONS
PROMOTIONAL EXPENCES
NIRMA does promotional expenses as under:
TOTAL PROMOTIONAL EXPENSE
(3% OF SALES)
ADVERTISING SALES PROMOTION
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.
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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 decideabout 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 broadportfolio 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 orintermediates 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
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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.
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(1) Do you use Iodized Salt or Unionized Salt?
(_) Iodized (_) Unionized
Now a days most of the people are aware about the benefits of the Iodized 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
No of respondents
Iodized Salt 229229
Unionized Salt21
Interpretation:
From the graph we can conclude that there are 92% of the respondents are aware about the Iodized
salt and they are using Iodized Salt and still 8% of the respondents dont know about the Iodized Salt. Sothere is more chance of occurring iodine deficiency disease to them.
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(2) Which brand of Iodized salt do you use?
TATA 76
NIRAMA 49
ANNPURNA 34
DANDI 30
SAFFOLA 12
CAPTAIN COOC 12
LOCAL 16
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 Iodized Salt and it is followed by the Nirma
Shudh Salt as 22% of the market of the Iodized salt. Annapurna and Dandi having shares of 13% and 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.
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TATA NIRMA DANDI ANNPURNA CAPTAIN
COOK
OTHERS
MANINAGAR 14 9