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The Nirma Story

Nirma was established in 1969 by Karsanbhai Patel as a manufacturer of phosphate free synthetic detergent powder. It was priced much lower than competitors and became very popular in Gujarat. By 1985, Nirma became the most popular detergent brand in India. It later expanded into soaps and personal care products. Nirma dominated the detergent market by 1970 and became India's second largest soap manufacturer by 1999 through pursuing a strategy of low costs, wide distribution, and market penetration. However, Nirma struggled in the premium product segment due to its image as a cheap brand and lack of distribution in urban areas.

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37 views

The Nirma Story

Nirma was established in 1969 by Karsanbhai Patel as a manufacturer of phosphate free synthetic detergent powder. It was priced much lower than competitors and became very popular in Gujarat. By 1985, Nirma became the most popular detergent brand in India. It later expanded into soaps and personal care products. Nirma dominated the detergent market by 1970 and became India's second largest soap manufacturer by 1999 through pursuing a strategy of low costs, wide distribution, and market penetration. However, Nirma struggled in the premium product segment due to its image as a cheap brand and lack of distribution in urban areas.

Uploaded by

munmundeb
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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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 –
offering a range of detergents, soaps and personal
care products
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 India’s second largest
manufacturer of toilet soaps
Toilet soaps 1999- Detergents 1999-2000
2000
Henkel
Wipro Spic
Godrej Others
Nirma
P&G
Others
HLL
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
Contd..
Advertising spend was low
Branding with celebrity endorsements
Create an ad campaign after getting feedback
Retailer Margins on premium segment
Nirma Premium Soaps 52 %
Nirma Shampoo 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 Nirma’s 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

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