31132395 nirma case study

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    PREPARED BY

    PRAMITA ATHIKARAY F

    NEELAM RATHODE F

    VIBHA SAHU F

    B.CHAITANYA KUMAR -

    The Nirma Story

    a dynamic phenomenon,a dynamic phenomenon,

    a philosophy,a philosophy,

    a revolutiona revolution

    that changed our lives!that changed our lives!

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    A Gujarati entrepreneur, Dr. Karsanbhai Patel, set up hisfirst detergent-making unit in the backyard of his home inAhmedabad - measuring all of 100 square feet.

    With bare hands and a bucket, he would prepare the dry mix

    detergent powder that he had invented, pack them inpolythene bags and then set off on his bicycle to sell thepackets door to door.

    Every packet of Nirma that Karsanbhai Patel sold to hisconsumers came with a money back guarantee.

    The cost-conscious approach of the initial years was toevolve into a strategic perspective.

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    Nirma was setup with Simple Yet Superior Marketing Strategy

    Product Positioning: Nirma found its place between the expensivedetergents and inferior washing soap slabs. The Nirma brand wasquickly recognized in Gujarat and neighboring parts of Maharashtraand the rest is history.

    Pricing: Nirma transformed the face of Indian detergent market bystaging the strength of low-cost detergent powder segment. The newyellow powder was priced at Rs. 3 per kg, at a time when HLL's Surfwas priced at Rs 13.

    Distribution: Nirma targeted non-users of Surf thus avoided theattention of HLL and later grew rapidly and was unstoppable once itwas in the right mode.

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    Nir a vs. industan ever

    Nir a took on the ight of giant ultinationals and wrote a newchapter in the Indian corporate history

    In the early 1970s, industan ever i ited ( ) reacted in a waytypical of any ultinational co panies. Senior executives were

    dis issive : "That is not our arket", "We need not be concerned."

    In the 1980sNir a catapulted Surf, and occupied the top slot in thedetergent products seg ent-a slot it has ade its own

    In fact, it wasNir a that inspired the birth of Surfs alitaji.

    soon recognized the disruptive threat posed by Nir a and introduce substitutes such as Wheel to ste the tide ofNir a

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    ROAD TO SUCCESS..1985

    2ndproduct from Nirma Nirma detergent cake. Huge success.

    Launched Nirma Super Detergent (superior spray-dried blue detergent

    powder.)

    Nirma beauty soap launched under the Umbrella brand name of Nirma.

    Umbrella brand successfully adopted.

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    Nima.1997 & shudh.2000

    Nima launched to counter breeze. Again a huge success in 18 months.

    Both Nirma and Nima captured almost all the increamental growth of last 12 yrs

    in the soap market.

    Both brands managed to hold a competitive market share.

    Millennium year Nirma shudh edible salt launched with world class Akzo

    Nobel Technology.

    Only the second vaccum salt in the country.

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    MARKET SHARES(DETERGENTS):1999-2000

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    MARKET SHARES (TOILET SOAPS):1999-2000

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    Cost competitiveness HLLs surf was highly priced in India during 1970s

    Yellow powder was mixed manually in workshops to get excise concessions.

    Managed with a workforce of 10,000 and 200 managers thereby trying to

    break the cost barrier.

    Supply chain management

    Managed to source packages from only 10 vendors but incurred high costs and

    delay in deliveries.

    Adopted centralized packaging : Able to cut its inventory costs by 40 %.

    Adopted flat distribution system : Nirma was directly connected to distributorsand no agents in between.

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    DISTRIBUTION

    Principal Channel

    - Lowest cost system in India

    - Speed in Distribution

    - Flexibility

    Nirma

    (8 Locations)

    Distributors

    (400

    Exclusive)

    Retailers

    (2 Million)

    Customers

    (400 Million)

    Whole sellers

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    Backward Integration

    After the withdrawal of the excise commission in 1982 Patel got into

    backward integration.

    Started manufacturing Sulphuric acid,Alfa olefin Sulphonate,Fatty acid in

    1983.

    1990Glycerin \ 1994 Packaging \ 1995 Single super phosphate \ 1997 NParaffin soda ash ,Industrial salt, Edible salt, Captive power point.

    Sustainable advantage

    Low cost labor

    Superior processes

    Mindset of cost-conciousness in India.

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    The sheer size of the operations makes it difficult to maintainthe highly centralized style of running that has always beencharacteristic of Nirma.

    Nirma also faces intense competition from the small sectors,which was its initial launch-pad.

    Since transportation costs are a very crucial part of costingmany manufacturers are locating their factories as close as

    possible to their eventual sales points so as to save ontransport costs.

    Nirma could well lose out soon on its best Unique SellingProposition-price.

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    BRANDING

    Nirma followed its original marketing and pricing strategies in botheconomy and premium segment.

    Launched product categories like premium detergent and premium

    toilet soaps in mid nineties and in 2000 entered hair market like nirma

    shikakai, nirma beauty shampoo.

    Challenged the biggest competitor, HLL by launching nirma bath

    against lifebouy, nirma rose against breeze and nirma lime against

    lime.

    Manufactured soaps with right scents keeping prices low.

    Geographical diversity Pink soaps in north, Green and sandal soaps

    in south.

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    Nirma believes in advertising only after they have launched aproduct in place.

    Nirma's advertising has always focused on the value-for-moneyangle.

    In 1982 we witnessed the birth of the first film for the brand, withthe effervescent jingle. Its 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 FMCGcompanies.

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    In 1989 the second commercial featured the superstar of those days,

    Sangeeta Bijlani, along with models such as Shikha Swaroop and

    Anuradha Patel. Used starlets like, Sonali Bendre and Riya Sen fortheir beauty soaps

    In 2005 a little change from its predecessors this was the food

    throwing ad (Hema, Rekha, Jaya, Sushma). It lent names and

    profiles to Nirma housewives

    The jingle being a part of Nirmas communication,was rarely

    tweaked with the swirl of Nirma girl in a frock on the pack shot.

    Other constants in a Nirma film included twirl of saris by models

    in outdoor locations.

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    In 2009 Nirma wakes up and decides to undergo a personality

    transplant.Awhopping Rs 1.5 crore is spent on that thought. The result a 'underwater' commercial, which showed dancers moving

    with flowing fabric - a metaphor for clothes being washed in a bucket.

    It did not use the iconic Nirma jingle.

    Now, Nirma is back to talking about the dirt tackling properties of thedetergent, as well as use the legendary 'Washing powder Nirma' jingle.

    In Soap adds, it is still using a relatively unknown stars , HansikaMotwani being the latest addition.

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    Gross sales over 2400 crores.

    ROCE of 24 % and RONW 22 %.

    8 manufacturing locations.

    Amongst top 10 Indian Brands. Nation wide Distribution reach.

    - 2500 Distributors

    - 2000000 Retailers

    - 40 Depots\

    Strong human resource base consisting of 15000 employees

    and 500 professionals.

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    Detergents

    Nirma Washing Powder

    Nirma Detergent CakeSuper Nirma Washing Powder

    Super Nirma Detergent Cake

    Nirma Popular Detergent Powder

    Nirma Popular Detergent Cake

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    Soaps

    Nirma Beauty Soap

    Nirma Bath Soap

    Nirma Lime Fresh Soap

    Nima Rose

    Nima Sandal

    Edible salt

    Nirma Shudh Iodized Salt

    Scouring products

    Nirma clean dish wash bar

    Nirma bartan bar

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    Challenging established multinationals needs extreme

    courage and to win in the long run needs marketing

    foresight. We believe, Nirma is at a crossroad, and so need to

    reinvent themselves, because the market itself has become

    much more evolved.

    What Nirma now needs to do is innovate from the product

    level and go for a more radical change.

    Abrand has to constantly refresh its communication.

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    THANK YOU