FOUNDATION OF MARKETING MANAGEMENT –MBA 136

CONTINUOUS INTERNAL ASSESMENT-III

1 MBA J (GROUP 7)
SUBMITTED BY:
SAMRIDH AGARWAL
1927721
ANISHA THOMAS
1927728
JOANNA JOSEPH
19272234
NEETHU NAIR
1927738
NIKITA KHERA
19272239
NIKHIL AGARWAL
1927757
Under the Guidance of
Dr. JOEL G
INSTITUTE OF MANAGEMENT
CHRIST (DEEMED TO BE UNIVERSITY)
BENGALURU
 INTRODUCTION
Nirma is a group of companies based in the city of Ahmedabad in western India that
manufactures products ranging from cosmetics, soaps, detergents, salt, soda ash, LAB and
Injectables. Karsanbhai Patel, an entrepreneur and philanthropist of Gujarat, started Nirma as a
one-man operation. Today Nirma has over 15,000 employees and a turnover of
over Rs. 3,550 crores.

OVERVIEW

Starting as a one-product, one-man outfit from a 100 sq. ft (9.3 m2) room in 1969, Nirma became
a very successful company within three decades. The company had multi-locational
manufacturing facilities, and a broad product portfolio under an umbrella brand – Nirma.

Nirma successfully countered competition from HUL and carved a niche for itself in the lower-
end of the detergents and toilet soap market. However, Nirma realized that it would have to
launch products for the upper end of the market to retain its middle-class consumers who would
graduate to the upper end. The company launched toilet soaps for the premium segment.
However, analysts felt that Nirma would not be able to repeat its success story in the premium
segment.

In 2000, Nirma had a 15% share in the toilet soap segment and more than 30% share in the
detergent market. Aided by growth in volumes and commissioning of backward integration
projects, Nirma's turnover for the year ended March 2000 increased by 17% over the previous
fiscal, to Rs. 12.17 bn.

HISTORY

In 1969, Dr. Karsanbhai Patel, a chemist at the Gujarat Government's Department of Mining and
Geology manufactured phosphate free synthetic detergent powder, and started selling it locally.
The new yellow powder was priced at Rs. 3.50 per kg, at a time when HUL's Surf was priced at
Rs 13. Soon, there was a huge demand for Nirma in Ruppur (Gujarat), Patel's hometown. He
started packing the formulation in a 10x10ft room in his house. Patel named the powder as
Nirma, after his daughter Nirupama. Patel was able to sell about 15-20 packets a day on his way
to the office on bicycle, some 15 km away. By 1985, Nirma washing powder had become one of
the most popular, household detergents in many parts of the country.

By 1999, Nirma was a major consumer brand, offering a range of detergents, soaps and personal
care products. Nirma's success in the highly competitive soap and detergent market was
attributed to its brand promotion efforts, which was complemented by its distribution reach and
market penetration. Nirma's network consisted of about 400 distributors and over 2 million retail
outlets across the country. This huge network enabled Nirma to make its products available to
the smallest village.

In November, 2007, Nirma purchased the American raw materials company Searles Valley
Minerals Inc., making it among the top seven soda ash manufacturers in the world.

The Logo of Girl which is mostly printed on the bags of detergent is drawn by Mr. Khanvilkar
who lives in Pune.

PRODUCTS
 NIRMA WASHING POWDER
This product created a marketing miracle, when introduced in the domestic marketplace. In 1969,
when the detergents were priced so exorbitantly that for most of the Indians, it was a luxury item.
Nirma envisioned the vast Fabric Wash market segment and sensed a tremendous potential
therein. This product was priced at almost one third to that of the competitor brands, resulting
into instant trial by the consumers. Owing to its unique environment-friendly, phosphate-free
formulation, the consumers became loyal to this brand, helping it to over-take the decades’ old
brands, in terms of volumes. This brand had been ranked as the “Most widely distributed
detergent powder brand in India” as per All India Census of Retail Outlets carried out in 435
urban towns by the AIMS (Asian Information Marketing & Social) Research agency [Brand
Equity - The Economic Times, March 11, 1997]. As per the ORG-MARG Rural Consumer
Panel [December 1998] survey, Nirma brand has been ranked as highest in terms of
penetration in washing powder category [BT Rural Market Watch, Business Today, June 22,
1999].

SWOT ANALYSIS

SWOT analysis of Nirma Washing Powder analyses the brand/company with its strengths,
weaknesses, opportunities & threats. Nirma Washing Powder is one of the leading brands in the
FMCG sector.

Parent Company Nirma Ltd

Category Home Care brands- detergents

Sector FMCG

Tagline/Slogan ‘Sabki Pasand Nirma, Washing Powder

Nirma’

USP Product with low price without compromising

on quality
Strengths

 Strong brand equity developed over the years.

 Wide distribution network.

 Market leadership in detergent market (mid-priced segment).

 Highly successful initial advertising campaign.

 In 2004, Nirma's detergent approached 800,000 tones – one of the largest volumes sold in
the world – under a single brand 'NIRMA'.

Weakness
 Limited export market as compared to international brands.
 Unable to completely penetrate in premium segment because of image.

Opportunities

 Export to developing /neighboring countries.

 Increase market share in premium segment by launching variants.

Threats

 Guerilla attack from local and independent producers.

 Broad attack from HUL and P&G.

 Growing income levels of India can cause shift to premium segment washing powders.
 SEGMENTATION, TARGETING AND POSITIONING

Segmentation Economy Segment

Targeting All Indian households and laundry stores

Positioning
Quality at very affordable price
SEGMENTATION

Segmentation is the process of dividing the consumers based on the different needs and their
wants. It deals with who buys and why the consumer buys the product.

Nirma has always segmented its consumers based geographic, demographic and psychographic.

Geographic: The reach of Nirma is excellent because of its distribution channels and also since it
caters to rural and also urban areas, its spread is vast.

Demographic: It considers the economic level of the consumers. Nirma was made for the people
who could not afford detergents of higher price. It stressed on 'Value for Money'.

Psychographic: Nirma made people relate to a brand when consumers could not afford a
branded detergent. They usually used local soap bars. It made the consumers easily accessible to
the rural market.

TARGETING

Mass Marketing: Nirma is spread across a huge market. It has a lot of loyal customers with its
products ranging low price segments to premium segments.

Concentrated Marketing: It segregated it’s market in the later years for low cost and
also premium segment. It introduced Nirma Super was introduced targeting the premium brand

Pricing Perceptive: In order to make sure the non-detergent users start using Nirma, it set its
price at a very affordable level and also this made them go ahead of their competitors
POSITIONING

Nirma positioned itself as an affordable product between the people who could not afford
detergents and for people who were looking for something more reasonable and added value for
money.

 It broke the image of detergent being a luxury item.

 With its quick success because of low cost it spread vigorously over the years.
 It is positioned as a powerful stain remover which is low on cost.
 Its unique features make it consumer friendly and builds the loyalty among them.
 It has the highest penetration in India.
COMPETITORS OF NIRMA
 MANAGEMENT LESSONS BY NIRMA
Though Karsanbhai Patel was a not an MBA graduate himself, but the tactics followed by him to
grow his business, has left the marketers bewildered and amazed. Nirma not only proved to be a
game changer but a trend setter for many small businesses. Here are few of the management
lessons taught by ‘Washing Powder Nirma’-

 Invest in R&D.
 Be Proactive in taking up responsibilities which are beneficial for the business.
 Provide your customers with ‘Value for Money’.
 Define your segment.
 Focus on building a brand.
 Diversify the portfolio.
CONCLUSION

It is said that one should– “Chase the vision, not the money, the money will end up following
you” and proving the validity of this quote is Karsanbhai Patel who started with a vision of
making his daughter famous through his brand and ended up becoming one of the greatest
entrepreneurs of all time. Not only did his brand earned enormous recognition but also became a
trend setter for many new businesses.