Nirma: Warrior at Crossroads

The beauty oI marketing is that oIten giants are shaken out their slumber when salvos get Iired Irom
unexpected quarters. Corporate consciousness marred by tunnel vision Iails to anticipate threats Irom the
unexpected. The so called detergent market or Iabric washing market was about to turn Irom the peaceIul
coexistence to a battle ground when a simple chemist at Gujarat began to produce a phosphate Iree
detergent powder in seventies. Hundreds oI entrepreneurs start their ventures only to bite dust. So it
wasn`t a great shake to produce a powder capable to washing clothes by simply mixing some chemical
ingredients. Anybody Iamiliar with preliminary knowledge oI chemistry could produce a detergent
powder. There was no reason Ior a giant like Lever to take cognizance oI somebody operating Irom a
small ten by ten room who went on to sell his stuII to a very proximate area. The man behind these
operations was Karsanbai Patel who named his commercial baby aIter his real baby girl as Nirma`. In the
beginning he actually paddled Nirma door to door on his bicycle and obviously the reach was limited by
his ability to cover only a short distance. This way to many a new product was born but Ior Patel it wasn`t
a product but an idea whose time had come.
Starting as a modest operation in early seventies nobody could anticipate the things to come in detergents
market dominated by big names like SurI, Det, and Swastik. It was something like an organized market or
no market. The regulated business environment did not Iavor entrepreneurship. Indian markets were by
and large characterized by dormant demand and supply constraint. During this period oI scarcity there
was little incentive Ior Iirms to promote their products. Whatever little was done it was to create
awareness. Patel simply emptied a measured quantity oI a kilo into a polythene transparent pack with its
brand name printed on it in red color in the name oI packaging. However one thing that stood out was the
mascot on the transparent pack. It was a girl dressed in a Irock. This mascot probably was inspired by
Amul girl or because oI the sentimental reason as Nirma was named aIter Patel`s daughter Nirupma`.
This modest operation starting in a small place in Gujarat was destined to become one oI the largest
selling detergents in the world.
In the beginning Nirma was priced at about Rs 3.50 a kilo. Hindustan Unilever (HUL then) brand oI
detergent SurI` was exorbitantly priced at about 15 a Kg. Strategically Nirma did not set out to compete
with HUL`s SurI. It was a simple cost plus reasonable margin pricing where in a margin to recover a
reasonable surplus was added to the cost oI production. The back oI the house operations allowed Patel to
minimize expenditure on overheads. And by and large manual operations kept the capital expenditure
down to its minimum level. The simplicity oI operations and a realistic assess oI what would be willing to
pay Ior a locally made no Irill product opened gates in the market what was to be known as the economy
segment oI the market. The low price oI the product allowed customers to lay their hands on a washing
powder- powdered Iorm-which hither to be beyond the means oI middle class because oI high price. The
options the available to customers was Iactory made brown soaps and Ilakes.

Patel started his very localized production oI synthetic detergent in 1960. But it took about two decades
Ior the venture to become private limited company in 1980. The company was engaged in production oI
synthetic detergents, soaps, chemicals and other related products. Later in 1993 the company changed into
a deemed public limited company then later in the same year it converted into a public limited company.
1994 saw the company going in Ior a public issue oI shared which were priced at a premium oI Rs 100
each. Christened as Nirma Ltd the company operated in a number oI Iields including washing powders to
toilet soaps to chemicals like sulphuric acid and glycerin. In 1995 the company set up a salt plant to meet
its entire salt needs. 1996 saw launch oI Nirma shampoo which during the time oI its testing showed great
promise. By 1997 Nirma emerged as the largest producer oI detergents selling over 4.4 lakh tones which

is higher than its archrival HUL. However HUL leads the pack iI detergents are combining with toilet
soaps. Nirma has also become the largest producer oI toilet soaps. In its eIIorts to grow Nirma launched
edible salt in 1999 sensing the market opportunity. in 2002 in its bid to achieve a big breakthrough the
company signed an agreement to market P&G`s brand Camay in India.
By 2004 Nirma washing powder achieved the distinction oI being the largest volume brand in the world.
Nirma`s sales touched 8 lakh tones. Nirma`s entry into the toilet soap market was late but it contributed
another 2 lakh tones. Nirma as a result become the largest detergent and second largest toilet soap brand
in India. Now Nirma was not a small Iry. In detergents and toilet soaps its market share rose to 38 and 20
percent respectively.
Nirma`s phenomenal growth is oIten attributed to its unique value Ior money proposition. It struck gold
by striking at the ignored untapped middle class economy conscious market. In terms oI the product
Nirma is a washing powder which washes the dirt without any other beneIit. However people lapped it up
because oI it catered to the aspirations oI millions who wanted to buy a detergent yet could not aIIord it.
With time Nirma launched two more variants Nirma Super at the high end and Nirma Popular at the lower
end. The company also launched a Iragrant detergent powder Nima Green with the smell oI lime. This
was an attempt oI the company to provide a Iragrant detergent powder diIIerent Irom Nirma to the
economy segment. Nirma also launched detergent cakes with each oI its detergent variations. Nirma
detergent cake came in 1987 Iollowed by Nirma Super detergent cade in 1992. And then came Nirma
Popular detergent cake, Nima Green and Blue detergent cake Iollowed the suit 1998 and 1999.
Contiuing with the expansion Nirma saw opportunity in utensil cleaning market and launched Nima
bartan bar (scouring cake) in 2000. The brand was promoted with the tag line Bartan hai ya darpan`.
Not to be leIt behind then came another product in this market Nima Clean( promoted as Chak chaka
chak`).
The Iorce called Nirma did not stop at detergent powders and cleaning bars. Rather toilet soaps category
became the next target oI the company. The Iirst attempt oI the company was to launch all male carbolic
soap named Nirma Bath Soap in early nineties. This product brought Nirma in direct competition with
LiIebuoy oI HUL and OK oI TOMCO. Nirma diIIerentiated its carbolic soap by lower than competition
pricing and higher Iatty matter. Soon to arrive on the scene was Nirma Beauty targeted at women market.
This was Ioray also Iollowed the overall Nirma imprint oI value Ior money strategy. The product was
priced lower to competition but oIIered better quality in terms oI the TFM. The market responded
Iavorably and soon it becomes the third largest selling soap in the country. In 1996 the company took the
Nirma to the premium segment by launching Nirma Premium toilet soap with a higher TFM oI 80. The
action was not limited to Nirma, the company launched Nima brand oI soaps with primarily Iragrance
oriented positioning. This was reIlected in the naming oI the products. The Iragrance was combined with
the brand to create the name like Nima Rose, Nima Lime, Nima Sandal. Later toward the turn oI the
century two more products to hit the market were Nima Herbal and Nirma Herbolina.
The company`s detergent business is showing signs oI decline. Nirma which wrote a new chapter in the
history oI detergents in India seem to be losing luster. Although still detergent enjoys a dominant position
is witnessing signs oI decline. The company`s priorities seem to be undergoing a transIormation as it has
branched into several businesses overtime. Although detergent business accounts Ior about 37 per cent oI
the company`s consolidated sales, it may take a back position in Iuture. In 2010 the turnover declined to
Rs 1787 croes Irom Rs 2109 crore last year.
Nirma is now a diversiIied company with presence in diIIerent businesses. These include chemicals,
pharmaceuticals, soda ash and alkyl benzene. The company also plans to get into cement business in

coming times. These businesses certainly provide outward signs oI the internal growth blueprint. It is
certainly a matter oI great curiosity to Iind out the pattern in this so called conglomerate growth strategy.
One oI the experts observed:
The products and businesses that a business has is nothing but outward manifestation of an
internal game plan. Understanding that game plan is often crucial. What is the method in this
madness that must be laid bare?
Nirma starting as a very local player managed to achieve a rare Ieat. A time came when Nirma
commanded close to halI oI the total detergent market humbling a giant like Hindustan Unilever. But
today the brand has been reduced to a share oI about ten percent. Hindustan Lever enjoys 35 percent
market and Kanpur based Ghari has gradually managed to built up share oI 13 percent.
Himanshu Kakar one oI the observers oI the industry has the Iollowing to say:
If the company takes its foot off the detergent pedal, it will be a great departure from the past.
Detergent business is what made Patel what he is today. He owes it to detergent business. Nirma
certainly is at cross roads. From being nothing worth noticing in the beginning Nirma became a
power to reckon with but now brand Nirma is gradually being pushed into a corner. It has lost
market share in a growing market. It is a paradox.
The Indian Iabric wash products industry has been through a subtle transIormation. Prior 1970s the
washing products were dominated by locally made washing cakes, long bars and Ilakes. The wash process
involved rubbing, beating and rinsing and oIten heating soap applied clothes. Then can came 1980s when
washing began to move in Iavor oI detergents powders. This was the beginning oI soak, soap and rinse
type oI culture. This was Iollowed by the launch oI advanced compact detergents. The new enzyme based
Iormulation provided customers with the beneIits oI doing away with soap application in the washing
process. The top contenders in this space oI advanced detergents are HUL and P&G with which market
SurI Excel and Ariel brands respectively. The soak and rise is suIIicient to get a complete wash. One oI
the industry experts expressed this transition as Iollowing:
The transition Irom locally produced brown washing soaps like Naulakha and 555 brands to
washing powder like Nirma and Vimal to detergents like SurI and Tide to advance compacts like
SurI Excel and Ariel is about both technology change and consumer beneIits. Consumers`
preIerence has been evolving with time. Back in time in seventies the Iocus was on washing` or
get the dirt oII clothes. But with the passage oI time new consideration oI Iabric care emerged. And
the present consumer expects newer Iorms oI augmentations or enhancements. Typically like a
ladder brands need to move up the ladder as strategy to leave stay ahead oI competition. This
Iluidity is both an opportunity and threat. The middle class which in which Nirma had built a huge
loyal customer base has not been a constant but certainly it appears Nirma has been. This
disconnect is maniIested in loss oI it leadership.
The Iirst set oI detergent brands including SurI typically were Iaced with challenges associated with any
new product launch. The old ingrained belieIs and behaviors entrenched the act oI washing. And soap
cake mostly made with vegetable oils played a signiIicant role. Mostly these cakes were either sold
unbranded which were bought either by the weight or number. DiIIerent shades oI greenish browns were
primary diIIerentiator. Some oI the cakes did carry labels indicating the name oI owners or some kind oI
mark. First movers like SurI which was a detergent had to expand eIIorts in getting the customers switch
Irom bars or cakes to powder. But the price oI SurI excluded the most market Irom conversion. It is in this
context Nirma became an instant success when it oIIered an aspirational product at an aIIordable price.

But with time probably brand could not evolve with time. One oI the commentators on brand had the
Iollowing to say:
ne of the key ingredients of Nirmas success has been simplicity of product and its
communication. A lot of money was spent on populari:ing the brand by using television and radio.
Brands simple see packaging with the image of a dancing frock clad girl could develop and
instant connect with the potential customers. The minimalistic packaging signaled affordability.
The fingle.'Washing powder Nirma, Washing powder Nirma, Doodh si safedi Nirma se aaye,
rangeen kapda bhi khil-khil faye, Rekha, Jaya, Meena aur Sushma, Sabki pasand Nirma` played a
significant role in creating awareness which translated into buying. Brand recognition and recall
played a significant role in making Nirma one of the top sellers in the country. But what is
surprising is that brand is promoted with almost similar kind of communication and product even
now. This certainly is lack of evolution. The brand could not move with time what to talk of moving
ahead of time. The loss of share is its own creation not something done by the competition.
Mr Singh oI a consultancy Iirm has the Iollowing opinion on Nirma story:
Brand recall does not translate into consumer buying. First and Ioremost is the product utility.
Advertising can create brand recognition and recall but it is the product perIormance which
ultimately matters. The initial excitement wears oII once the product is tried and it Iails to live up
to expectations. Nirma and its advertising did excite people two decades back but now it does not.
The category has grown crowded and many similar and diIIerent brands adorn the shelI space.
The detergent category evolved no diIIerent Irom the category law. The brands have multiplied. There are
hundreds oI brands similar to that oI Nirma in look, Ieel, perIormance, names and even communication.
There was a time when Nirma set itselI apart Irom others on dimensions important to its target market.
But this is not true any longer. One oI the partners in brand consulting Iirm Marketing Crow had the
Iollowing to say:
Nirma Iailed to Iactor in dynamism oI the market. The market as it stands today is completely
transIormed. Nirma`s eIIorts have been halI hearted when they introduced new products in the detergent
arena. Brand diIIerentiation based Iundamentally on color could hardly be oI any signiIicance and
customers discovered that.
There are many examples oI Iirms which struck gold with one product but later could not repeat the same
Ior others. Nirma`s competitors both old and new moved on with time. One oI the college goers Ior whom
detergent is a peripheral product in current stage oI liIe observed:
I am very different from my mom. And my washing needs are also very different. Gone are the days
when clothes were differentiated on the basis of material used like cotton or silk now they are
dresses. Think of Nirma it reminds of my mom. It is my mothers washing powder not mine. Look at
the fingle what does it say Washing powder Nirma, Washing powder Nirma, Doodh si safedi
Nirma se aaye, rangeen kapda bhi khil-khil faye, Rekha, Jaya, Meena aur Sushma, Sabki pasand
Nirma, I dont want safedi, my dresses are colored and I dont want to foin the club of Meena and
Sushma.
Nirma is a proIitable business Ior the company. But this is not it. It must grow iI the market is promising.
It will be very unIortunate iI the brand which challenged the might oI MNCs and gave Indians
entrepreneurial conIidence vanishes into oblivion. The brand still enjoys huge recall, recognition and
trust. All it needs a Iresh approach and moves.