NIRMA

By:

BORGES AARON FRANCIS

ASHISH

CHIRAG

CAROLINE

Profile

Type: Public Company Industry: FMCG Founded: 1969 Headquarters: Ahmedabad, Gujarat Key People: KarsanBhai Patel

Products: Nirma Detergent and Soap etc

SWOT Analysis

Strength: Strong Brand equity. Nirma is a Rs.17 billion umbrella brand offering

consumers a broad portfolio of products at multiple price points in the Detergents, Soaps & Personal Care market.

Produces a range of industrial chemical products which primarily serve as raw material or intermediates for Soaps & Detergents business.

Market leadership in detergents market and fabric wash industry and second largest player in Toilet soaps industry.

Wide distribution network.

Weakness: Less presence in premium segment. Lack global tie ups and thus lacking in export markets.

Opportunities: Exports. Acquisitions for strengthening its distribution tie ups. Entry into other categories like shampoos, toothpastes and fabric whiteners.

Threats: MNCs coming to India particularly in Toilet and Soap industry. Emergence of small but strong regional players.

Competitor Analysis

HUL:Surf ,Rin & WheelP& G: Ariel & TideHenkel spic: Henko and Mr White

Analysis:

Nirma`s Strength has always been value for money.It has managed to defeat many MNC with this policy.First Brand to recognize the power of the Indian rural market.

Strategies to Fight Competition:

By offering premier productsTie-up with foreign playersUsing mass media to counter smearing campaigns by competitors.New style of packing .

Pricing:

Price Based Marketing Strategy Nirma entered the detergent market of India at a time when Hindustan Lever Limited (HLL), an FMCG giant, with its Surf, had established a near monopoly in the business. Nirma succeeded through its price-led strategy.

Cost Leadership Nirma had built cost leadership right from the beginning. It was this cost leadership built early on that enabled Nirma to follow the price-based marketing strategy. Choosing the price conscious segment as its market, Nirma Chemicals offered a low price brand and promoted it aggressively. It relied on low cost technology, process and raw materials

Note: Nirma’s price-led strategy was so successful that even the market leader, who was all along following the differentiation-led route, was forced to review its strategy.

Target Audience for Nirma

Mass Marketing - Nirma tried to tap the huge market. It is also a one-type of

value product to the brand loyal consumers, catering their distinct needs. The product is stable, offers best quality at the most affordable prices.

Concentrated Marketing – It has always concentrated on the smaller segment of markets, Due to its unique formulation, this product offers benefits like less melting in water, better stability, and therefore lasts longer. As per the ORG-MARG Rural Consumer Panel [December 1998] survey, Nirma brand is ranked highest in terms of penetration in washing cakes / bars category [BT Rural Market Watch, Business Today, June 22, 1999].

Pricing Prospective - To cater to the needs of the specific target audience, Nirma launched a good quality product at a very affordable price. The objective is to convert the non-users of detergents into users and also prevent the competitors and local manufacturers to lure away the prospective Nirma consumers by sub-standard products. This product has created a loyal consumer base of its own and has established substantial amount of volumes.

Segmentation - Demographics and Psychographics

Demographic segmentation: In demographic segmentation, the market is divided in to groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education religion, race, generation, nationality and social class.

Income: Income determines the ability of consumer to participate in the market exchange and hence this is a basic segmentation variable. Nirma washing powder, for example, was launched as the lowest priced detergent in India primarily targeted at the middle-income segment of the market.

Social Class: Social class has a strong influence on preference in clothing, therefore to maintain it detergent will also be a preference.

Psychographic segmentation: psychographic is the science of using psychology and demographics to better understand consumers. In psychographic segmentation, buyers are divided in to different groups on the basis of psychological, life style or values .People within the same demographic group can exhibit very different psychographics profile. Values and lifestyles significantly affect the product and brand choices of consumers. Religion has significantly influence on values and lifestyles.

Detergent powders were considered as luxury products in late 60’s, Nirma with its unique price made it a easily accessible for the masses, providing a luxury segment in market at a low cost.

Clean washing: The advertisement shows the Nirma girl and other actors in advertisements always in white.

Brand Positioning for Nirma

Nirma found its place between the expensive detergents and inferior washing soap slabs.

The Nirma brand was quickly recognized in Gujarat and neighbouring parts of Maharashtra and the rest is history.

It is positioned as a powerful stain remover which is low on cost.

Due to its unique formulation, this product offers benefits like less melting in water, better stability, and therefore lasts longer.

As per the ORG-MARG Rural Consumer Panel [December 1998] survey, Nirma brand has been ranked as highest in terms of penetration in washing powder category [BT Rural Market Watch, Business Today, June 22, 1999].

The below points are important to understand the positioning strategy applied by Nirma -

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

Promotion strategy of Nirma

• Nirma believes in advertising only after they have launched a product in place.

• Nirma's advertising has always focused on the value-for- money angle.

• In 1982 we witnessed the birth of the first film for the brand, with the effervescent jingle. It’s simple and catchy – “Dudh si safedi Nirma se aye, rangeen kapda bhi khil khil jaye”

• Nirma spent only 1.25 - 2 % of its turnover on advertising as of 6 – 10 % likewise other FMCG companies.

• In 2009 Nirma wakes up and decides to undergo a personality transplant. A whopping Rs 1.5 crore is spent on that thought.

• A brand has to constantly refresh its communication, Now, Nirma is back to talking about the dirt tackling properties of the detergent, as well as use the legendary 'Washing powder Nirma' jingle.

Distribution Strategy of Nirma

Nirma Limited markets its products through its fully owned subsidiary Nirma Consumer Care Limited (NCCL), which was incepted in 1985. NCCL in turn resells these products in the market under the umbrella brands “NIRMA” and “NIMA” along with extensions.

Nirma pioneered the concept of flat distribution network. Nirma Consumer Care Limited operates with two parallel distribution networks. The NIRMA brand is marketed through the first network, which consists of about 450 exclusive distributors. It is one of the lowest cost FMCG distribution channels of the country.

Principal Channel:

• Lowest Cost system in India

• Speed in distribution

• Flexibility

The NIMA range of products is marketed through a parallel marketing network that comprises of more than 2000 distributors.

Parallel Channel:

• Wider Reach

• Speedy Market Intelligence

• Competitive edge & Better focus

• Complementing Principal Channel

All NIRMA and NIMA range of products have a retail reach of over two million retail outlets and more than 40 million loyal consumers spread all over the country.

The Company has been successful in establishing an extremely good urban as well as rural presence through the two distribution channels. The distribution channels have played a significant role in making Nirma a house-hold name. The efficient network has made Nirma Washing Powder and Nirma Detergent Cake, the brands with highest penetration in the respective product categories in the market. The network is well equipped to meet the demands of the loyal consumers of the Company across the country.

The robust network ensures the availability of various products at different retail outlets across the nation. The Distribution channel is geared up to enhance trade relations, build up the retailer base by providing various benefits and incentives, organize and implement different activities to generate sales and manage numerous other programmes, schemes and activities concentrated towards business development.

FACT - AIMS survey ranked Nirma detergent cake as “The Most widely distributed detergent cake brand”.