Nirma

Group 8

Prakhar Singh - 100

Puneet Gupta - 101
Purbhasha Tomar -102
Radhika Goel - 103
Rahul 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

o r
e F
a lu ey
V on
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Innovative Distribution
Network

Back
Brand Building
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 1977-1989
 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:
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
New Products Range
Industrial Products
Consumer Products
Crowded Segments
 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?