The Nirma Story

Presented by : Pankaj Thakur 0000 Vinod Gupta 9120 Shefali Nair 9136 Rahul Patil 0000 Jiten Sampat 0000

History
Established in 1969 by Karsanbhai Patel

Patel a chemist at Gujarat Govt. Dept Of mining &

Geology Manufactured phosphate free synthetic detergent powder Yellow powder was priced `3.50/kg against HLL `15 Named the powder as Nirma, after his daughter Nirupama Sold 15- 20 packets daily in Kishnapur (Gujarat) Till 1985 - became most popular detergent brand By 1999, Nirma was a major consumer brand

Contd..
Established 6 manufacturing facilities

Network of 400 distributors & 2 million retail

outlets Expanded to Bangladesh with JV of Commerce Overseas Ltd

Road to Success
By 1970, Nirma dominated the detergent powder

market By 1990, Nirma entered the Indian toilet soaps market Nirma Beauty soap By 1999, became Indias second largest manufacturer of toilet soaps
Toilet soaps 19992000

Detergents 1999-2000
Henkel Spic Others P&G

Wipro Godrej Nirma Others HLL

Backward Integration Established Raw Mfg. Plants

Baroda
Completed six months

Bhavanagar
Also completed in record

ahead of estimated time Cost of 2.5 bn against 2.8 bn as estimated Produced N-Paraffin for (LAB) & Synthetic detergents. Capacity of 65000 tpa Tech sourced from UOP Inter Amercana USA.

time Cost of 9.85 bn as against 10.36 bn estimated. Production of soda ash Capacity of 4,20,00 tpa Tech sourced from Akzo Nobel Engineering Holland

Backward Integration Contd.

For In House Printing & Packaging

Acquisition of Kisan Industries at Moriya,

Ahmedabad

Strategies Cost Leadership

Value proposition high-value product at lowest

possible price Backward integration production plants for raw materials Latest technology in manufacturing facilities Effective and wide distribution network and eliminating intermediaries i.e. factory - distributor Use of cash & carry method In-house Printing and Packaging Market penetration Development of regional warehouses

Expansion in premium segments

Entered into premium categories like Detergents ,

Toilet Soaps , Hair Care market Detergents Nirma Super Washing Powder and Detergent Cake Toilet Soaps Nirma premium, Nirma Sandal, Nirma Lime Fresh Hair Care Nirma Shikakai, Nirma Beauty Shampoo Toothpaste Nirma Toothpaste

Contd..
Proper positioning with segmentation
SEGMENTS
Health Beauty

NIRMA
Nirma Bath Nirma Beauty Soap

HLL
Lifebuoy Lux

Floral
Lime Fresh

Nirma Rose
Nirma Lime

Breeze
Jai Lime

Good quantity(high fatty matter), proper scents,

low cost Managing Geographical Diversity - North prefer Pink soaps - South prefer Green & Sandal

Contd..
Advertising spend was low

Branding with celebrity endorsements

Create an ad campaign after getting feedback Retailer Margins on premium segment

Nirma Premium Soaps Nirma Shampoo

52 % 140 %

Failure of Nirma in Premium Category

Followed same price strategies as in economy

segments Concentrated on volumes Lacked good distribution network in urban areas Less price sensitive segment then also focused on price Initial image of mass category product or a cheap brand

Q1. Will Nirmas cost-effective business model be successful in the long run? Justify
No

As country is developing and the disposal income

is increasing Rural to urban conversion Cheap brand image

Q2. How can Nirma effectively counter the increasingly competition?

By repositioning

Innovation
Expanding the market Acquiring the local firms

Q3. Was it necessary to enter the premium segment?

Yes

Huge opportunity to penetrate in urban