Nirma

Group 8

Prakhar Singh - 100Puneet Gupta - 101Purbhasha Tomar -102Radhika Goel - 103Rahul Pareek -104

Genesis

KarsanBhai started manufacturing low cost detergent in the backyard of his home

Distributed Nirma door to door on his bicycle and Sold with money back guarantee

Placed the product within the reach of common man

The market was ruled by Surf, an HLL brand.

The detergent was sold at Rs 3.5 per kg when Surf was sold at Rs 15 per kg.

Factors for low cost Easy procurement of raw materials Manual production Small scale producer – 15% excise benefit Labour cost – 15-25 per person day as compared to HLLs 30-

4 per person day. Lowest cost at any point in time Low margin, High volume Packaging – Polythene bags rather than cartons Own packaging material unit and printing press

Steps To Glory

Value for Money concept

Converted a luxury product into a bare necessity product

Rural Focus – Identified markets where others saw none

Achieved penetration where others felt consumer mindset could not be changed

Flat, efficient, robust distribution network

Multidimensional aggressive marketing and manufacturing strategy

Aggressive media strategy

Business Strategy

Market Creati

on

•Economies of scale

•Product InnovationMarketi

ng and Distribut

ion

•Umbrella Branding

•Parallel Distribution

Backward

IntegrationValue For

Money

Brand Building

Word of Mouth

Visibilty in General Grocery Stores

Launched “Doodh si Safedi” campaign on All India Radio

Launched the “Doodh si Safedi” campaign on TV

Corporate Social Responsibility

Establishment of Nirma Education and Research Foundation in 1994, realizing the significant role of education in the socioeconomic development of the nation

Set up of Nirma Labs with an objective to nurture, promote and facilitate potential entrepreneurs in their pursuit of knowledge

Establishment of Nirma Memorial Trust to look after deprived women in Gujarat, build Ashrams and guesthouses for pilgrims and the elderly

Nirma Foundation set up in 1979 contributes towards running of schools, colleges, temples and social institutions

Market Share 1977-198919

77

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

0

10

20

30

40

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60

70

80

Nirma Surf

Competitors Reaction HLL launched a low priced Detergent Powder named “Sunlight” in East India

Operation STING to inhibit Nirma growth

Launched detergent of equivalent quality - Wheel

Production Method:

Set up new plants in regions where raw materials were easily available. Afacon manufacturing unit – Just in time Semi –automated units to replicate small manufacturing units of Nirma

Advertising:

Safe on hands and clothes Tarnishing Nirma as a ‘yellow’ powder as harsh, acidic brand SURF launched Lalitajis commercial

Distribution: Bypassed C&FAs

Emergence of copycats

Some Emergent Issues for Nirma

Rival companies have attacked its ‘value for money’ position, potraying the brand to be inferior, cheap and a less smart alternative

Nirma projected as a ‘yellow’ powder as harsh, acidic brand by competitors

Increase in disposable income of middle class ‘Money for value’ rather than value for money It is seen as a company which pays low salaries and cut costs

everywhere

Organizational Restructuring

In 1997, four of its companies, Nirma Detergents Limited(NDL), Nirma Soaps and Detergents Limited(NSDL), Shiva Soaps and Detergents Limited(SSDL), Nilima Chemicals Limited(NCL) were merged with Nirma Limited

Why Merger?

Business synergy Reduction of overheads Economies of scale

Results of the merger?

Rationalization of marketing Leverage of internal and external resources Rationalization of manufacturing

New Products Range

Products

Consumer

Industrial

Industrial Products

Industrial Products

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

Fertilizers Single Super Phosphate

Consumer Products

Detergents

Powders•Nirma Washing Powder•Super Nirma •Nirma Popular

Cakes•Nirma Detergent Cake•Super Nirma•Nirma Popular

Toilet Soaps

Carbolic Soaps •Nirma Bath Soap

Beauty Soaps•Nirma Beauty Soap•Nima Rose •Nirma Lime Fresh

Premium Soaps•Nima Sandal

Packaged Foods

Iodized Salt •Nirma Shudh

Scouring Products

Dish Wash bar•Nirma Clean

•Nirma Bartan

Personal Healthcare

Toothpaste •Nirma Toothpaste

Shampoo •Nirma Shampoo

Crowded Segments

ManufacturerPremium category

Popular Category

Economy Category

HUL Surf Excel Rin Wheel

NirmaSuper Nirma

BlueNirma

P&GAriel Tide

Others HenkoOk

HippolineFena

Sustainability

Benefit of Size

Building of Massive capacities

Experience Effect- industry experience of over 40yrs

Expansion into similar low cost markets like soaps

Sustainability

Resource Base Backward Integration Rationalization of Product Lines

Others Collaborations Identity/Positioning Response Lag Stagnant Market Segment

Recommendations

Positioning – From Cost to Quality Target Other geographical areas New Product Development - First mover advantage Continue Backward Integration Strategic Collaboration

Thank You…Questions?