Nirma..Marketing strategy!!

As soon as one hear the word “Nirma” the first thing that strikes almost everyone is the decades old jingle “Doodh si safedi Nirma se ayi..”.Apart from that low-cost has become synomous to Nirma.Nirma was the invention of Karsanbhai Patel,a chemist from Gujarat who worked for the Department of Mining and Geology. Nirma was founded in 1969 and was named after Karsanbhai Patel's daughter Nirmala.He was experimenting to develop a detergent for door-to door selling in oder to earn some extra income and so Nirma came into existence.

The USP of this detergent was that firstly it was phosphate free unlike other washing powders secondly due to good quality and low price and thirdly becaue of the distribution model adopted by Patel which was door to door selling.At that time when the Surf was priced at Rs 15 per kg ,Nirma costed only Rs 3 per kg.Due to these reasons the popularity of Nirma grew in Patel's hometown and so he started the packing of Nirma washing powder in the room of his house itself.Instead of relying on any other source for the distribution of the detergent he would actully sell it on his bicycle on the way to office.Initially he hasd diffculty in pursuading the local shopkkeeps to stock his detergent and so he recruited housewifes to sell and create demand for the detergent.

Nirma was becoming popular mainly in the lower end segment due to a number of factors.Firstly even after a good start and success they did not give up on their philosphy of “providing quality products at best prices” .Second factor which contributed to the success was their promotional efforts and distribution network.They used around 400 distributors who would supply to over 2 million retail .One factor which diffrentiated it from its competion was that Nirma also had a deep penetration on the rural sector too which was untapped by Surf which mainly operated in the upper segment.

By 1970 HLL took notice of Nirma but did not give it a much thought as they thought that “this is not our market”.Their perspective was that Nirma is a inferior quality product and it can not affect Surf''s business.But soon HLL realized the potential danger from Nirma due to its increasing market share.To combat the competition it launched Wheel.Wheel just like Nirma catered to the low end segment. HLL also developed door to door distribution stratergy for Wheel. It was in 1980 that Nirma moved ahead of Surf.

In 1982 that Nirma launched it's first TV commercial with it's famous “Washing powder Nirma, Nirma” jingle.Since then the jingle has been a part of all Nirma communications.By 1985 Nirma had become a popular brand in households.

Patel now was thinking of cost reduction without affecting the quality of the detergent.So it planned for a backward integration to reduce the cost of the raw materials.It was planned to set up two plants at Baroda and Bhavnagar. Today it produces 90% of the raw material in their plants itself.They further eliminated the intermediaries and adopted the policy of directly supplying the order to the distributors using their own vehicles.In some places like Andra Pradesh ,Tamil Nadu where it was difficult to reach on short notice depots were maintained.They further started with in-house prinitng to reduce the cost of packaging.

Nirma was operating in the low end segment,and the upper segment was yet to be explored by them and so expanded in the beauty segment in the mid 90s.People were skeptical if Nirma would be able to repeat its success in the premium segment or not.Even in the premium segment it kept its prices lower than the competing brands.It created a sub premium brand by selling high fatty and rightly scented soaps at much lower prices.To combat competition from HLL it positioned its products against it like Nirma Bath against Lifebuoy, Nirma Beauty Soap against Lux.

One intresting study was conducted by Sansika Marketing Consultant -Nirma's Marketing Firm that in North people prefer pink color soas,in South people like green color soaps and sandal soaps.Hence it tried to segment the market on that basis.This time to succed in this segment it passed the benefits to the retailers and offered them huge margins .An unbelievable margin of 140% was given on Nirma Shampoo.

But the problem was that the soap segment had too many competitors and the market was too much fragmented and made it difficult for any soap to have a large market share.Here the USP of Nirma of low price did not help in the premium segment.People thought it was a cheap brand andwere almost ashamed of telling that they use Nirma toilet soaps and shampoos.Nirma did not get much success in the premium segment.Its venture in the toothpaste and shampoo failed though the salt Sudh is doing well.

Today it is the second largest toilet soap brand in India and has one of the largest volume sales with a single brand name in the world.

Neha Bisht

GLC RMM1012