detergent wars in india (surf excel, ariel, nirma, wheel, tide, ghari)

Detergent Market in India

Indian Detergent Market LandscapeCurrent Market Size (Organized Detergent Market) 2015: Rs.15,000 CroreTotal Volume 2013 (Production): 1.9 Million TonnesCAGR (2012-2015): 11% approx.Washing Machine Penetration in India: 8.8%Indian Population Division:

Urban: 33%Rural : 67%

Households Owning Washing Machine:Urban : 27.5% of all urban householdsRural : 0.6% of all rural households

Source: Market Research Report on Detergent Industry in India by Niir Project Consultancy Services (NPCS)

Indian Detergent Market Landscape

Detergent

Powder Bars Liquid

Indian Detergent Market Landscape1959

• HUL launched Surf Excel.

1969• Nirma was launched.

1987• RSPL launched Ghari.

1988• HUL launched Wheel.

1991• P&G launched Ariel.

2000• P&G launched Tide.

Timeline:

Indian Detergent Market Landscape

34

22.818

12

13.2

Market Share Division

HULGhariP&GNirmaOthers

The Detergent market is dominated by following major players:

1. Hindustan Unilever Limited (HUL)2. Rohit Surfactants Pvt. Ltd. (RSPL)3. Procter & Gamble (P&G)4. Nirma5. Jyothy Laboratories & Others

Premium Mid Scale Economy (Mass)0%

10%

20%

30%

40%

50%

15%

40%

45%

Detergent Market Segmentation

S u r f, A r i e l R i n , T i d e G h a r i , N i r m a , W h e e l , Fe n a Brands:

Porter’s

Five Forces Model

Competitive Rivalry

Threat of New

Entrants

Bargaining Power of Suppliers

Threat of Substitutes

Bargaining Power of

Buyers

We will measure the forces on the following scale:

Very Low Low Medium High Very High

1.) Competitive RivalryPremium Price Segment

• High• High because easy brand

switching.• For Tier I and Tier II cities

only and competitive rivalry is high there.

• Surf Excel, Ariel, Henko• Surf Excel & Ariel face

tough competition from each other, where Ariel offers fragrance, Surf Excel offers a bit lower price compared to Ariel.

Mid Price Segment

• Very High• Very high because more

number of players, no loyalty, and customers switching to different price segments.

• Tide Plus, Rin, Super Nirma Blue, Mr. White, etc.

• Tide, faces lot of competition from Surf as well as Ghari, Ghari being low priced and good quality.

Low Price Segment

• Very High• Very high as Customers in

this segment, easily switch brands based on small price differences also. Moreover markets are toppled easily by distribution strategies and promotions.

• Nirma, Wheel, Ghari all face fierce competition in this segment based on price, product differentiation, distribution strategies

2.) Bargaining Power of SuppliersPremium Price Segment

• Low• Main ingredient required

to be procured from suppliers is soda ash which is not an ingredient hard to make.

• Suppliers are ready to provide good quality soda ash.

• But still quality matters and hence bargaining power of suppliers is low but not very low.

• E.g. Surf, Ariel, etc.

Mid Price Segment

• Very Low• Multiple suppliers exist,

who provide desired quality of soda ash to these companies and hence they don’t have any competitive edge.

• Moreover, suppliers do not want to lose huge contracts with behemoths like P&G and hence they have low bargaining power

• E.g. Tide

Low Price Segment

• Very Low• Many suppliers of soda ash• High quality of soda ash is

not required and it can be procured from any supplier.

• Companies like Nirma produce their own soda ash (Backward Integration)

• Hence suppliers have very low bargaining power.

• E.g. Nirma, Wheel, Ghari, etc.

3.) Threat of New EntrantsPremium Price Segment

• Medium• Entry is difficult as there

are difficulties to get premium loyal customers.

• But still with differentiated products it is still conquerable. Hence the medium price segment.

• E.g. Henko from Henkel entered the premium price segment but then failed miserably.

Mid Price Segment

• High• Entry is easy as there are

low barriers to entry• As it is FMCG industry it is

easy to achieve high economies of scale.

• E.g. Tide was launched in 2000 ,still it was able to get a decent market share

Low Price Segment

• Very High• Entry is very easy as there

are low barriers to entry• Economies of scale• In this segment, even a

small price difference can topple markets of a brand.

• E.g. Ghari launched their business in 1987 when Nirma was at its peak but later the it overtook Nirma.

4.) Bargaining Power of BuyersPremium Price Segment

• Medium• Any product with a good

price difference or differentiated features will be opted by buyers.

• Hence price difference does change buyer behavior but differentiated products also tend to have their own say in market.

• E.g. When Ariel came out with detergents with fragrance flavors, customers switched to that even when Ariel charged higher price then surf excel

Mid Price Segment

• High• Due to higher competition,

bargaining power of buyers is usually high.

• If companies have to resort to offers and lesser margins then that shows high bargaining power of customers.

• E.g. Tide generally attracts customers with “20% extra”, etc. type of offers which shows buyers have good bargaining power.

Low Price Segment

• Very High• More number of players,

customers in this segment are very cost sensitive. More offers have to be provided to attract customers. Buyers also demand quality improvements in products. This shows very high bargaining power of buyers.

• E.g. Nirma, Wheel, Ghari. Ghari offered better quality and buyers switched to it and this Nirma & Wheel had to counter this with various measures.

5.) Threat of SubstitutesPremium Price Segment

• High• In premium segment,

frequency of purchase gets affected as customers able to pay premium prices also tend to spend more on maintenance. Hence they are preferring Dry Cleaning more which affects the premium segment more. Other alternatives, presumably high priced, makes this segment highly vulnerable.

Mid Price Segment

• Medium• Any New technologies, like

liquid soaps, etc. can easily replace the existing players/ brands.

• More people moving to higher segments, and increasing disposable income makes this segment little bit vulnerable to alternatives like Dry Cleaning. But still the market is huge and the whole market cannot move to alternatives, hence threat is medium.

Low Price Segment

• Low• There is no economical

alternative/substitute which is cheap enough to replace already low-priced detergents.

• So the threat from substitute products / alternatives for fabric-washing is low.

Porter’s

Generic Strategi

es

Cost Leadership

Differentiation

Cost FocusDifferentiation

Focus

FocusBr

oad

Targ

etN

arro

w T

arge

t

Lower Cost DifferentiationCompetitive Advantage

Mar

ket

Scop

e

Surf Excel

Launched in 1959 in India as 1st Detergent Powder.

One of the brands under Unilever.

Ariel

Launched in 1991 in India as Detergent Powder.

One of the brands under P&G.

Surf Excel Product RangeSurf Excel

Matic

Surf Excel Quickwash

Surf Excel Easy Wash

Surf Excel Liquid Wash

Surf Excel Product Range

Surf Excel Matic

Surf Excel Quickwash

Surf Excel Easy Wash

Surf Excel Liquid Wash

Surf excel Quickwash with X-tra clean particles combines the power of stain removing products like blue, bleach and lemon. Multiple stains are removed with just 1 product.

Surf excel Easy Wash is a superfine powder, in which tough stains are taken off in a jiffy. It is made with superior technology which unleashes the power of 10 hands

Works in high water levels of front load washing machines. It has hand rub action power and is value for money. For 2 different types of washing machines, it offers 2 products: A.) Surf Excel Matic Top Load, B.) Surf Excel Matic Front Load.

Surf excel Liquid Detergent works with the Dip Dab Drop formula. It has better dissolution with superior fragrance. It offers ‘Color care’, and is safe for hands.

Ariel Product Range

Ariel Color and

Style

Ariel Matic

Ariel Complete

+

Ariel 24 Hour Fresh

Ariel Product Range

Ariel Matic

Ariel Complete+Ariel 24 Hour Fresh

Ariel Colour and Style

Ariel Complete+ removes tough stains in just 1 Wash. Especially formulated for semi automatic washing machines, Ariel’s cutting edge technology to provide impeccable cleaning

Ariel 24 Hour Fresh provides tough stain removal along with long lasting fragrance. Advanced perfume technology provide impeccable clothes along with refreshing fragrance that lasts upto 24 hours.

It provides the Best stain removal in 1 Wash. Especially formulated for Fully Automatic Washing Machines. Best used for Front & Top Loading Fully Automatic Washing machines

Ariel Colour & Style is specifically created for coloured clothes to remove tough stains and prevent colour fading. With Colour Lock Technology, it ensures coloured clothes stay shining like new.

“DaagAchheHai”

“Maa KeHaathon

JaisiSafai”

“#ShareTheLoad”

Ad Ad

Ad

Surf Excel ArieLS – SegmentationPremium Segment, Detergent.Mom’s washing children’s dirty clothes byT – TargetingBlue: All mid scale and premium segment buyers, Matic: Washing machine users Bar: Medium and Low Income families Quickwash: Consumers in water-scarce and hard-water regions.“Daag Achhe Hai”P – PositioningPositioned as a quality product at comparatively lower prices, in premium segment.

S – SegmentationPremium Segment, Detergent.Nuclear families with high income-levels.T – TargetingUpper middle class – rich class of the society wanting superior quality. Washing machine users are also targeted by its product Ariel Matic.Customers wanting fragrance and color preservation.#ShareTheLoadP – PositioningPositioned as superior stain remover, offering fragrance and preserving colors, for a premium price.

2kg 1kg 500gm 100gm 60gm 25gm

Rs405 Rs210 Rs115 Rs20 Rs10 Rs5

2kg 1kg 500gm 100gm 60gm 25gm

Rs437 Rs240 Rs130 Rs40 Rs20 Rs10

Porter’s Generic Strategies

Cost Leadership

Differentiation


Focus

Focus

Broa

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rget

Nar

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Ta

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Mar

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Nirma

Launched in 1969 in India as Very Low-cost Detergent Powder.

Nirma brand launched by a chemist named Karsanbhai Patel

Wheel

Launched in 1988 in India as fragrant low cost Detergent Powder.

One of the brands under HUL.

Nirma Wheel• In 1969, Karsanbhai Patel, a chemist, founded

Nirma in Gujarat and went on to sell it nationally by 1985.

• Patel was offering detergent products for poor consumers, mostly in rural areas.

• In fact, Nirma created a new business system that included a new product formulation, low-cost manufacturing process, wide distribution network, special packaging for daily purchasing, and value pricing.

• Current market share of Nirma is 12% of the total detergent market in India.

• HUL, in typical MNC fashion, initially dismissed Nirma’s strategy. However, as Nirma grew rapidly, HUL could see its local competitor was winning in a market it had disregarded.

• HUL decentralized the production, marketing, and distribution of the product to leverage the abundant labour pool in rural India, quickly creating sales channels through the thousands of small outlets where people at the bottom of the pyramid shop.

• In 1988, HUL launched Wheel to counter Nirma.• Current market share of Wheel is 16.9% of the

total detergent in India.

History

Nirma Product Range

Super NirmaDetergent

NirmaDetergent

Nirma Detergent Cake

Super NirmaDetergent

Cake

Active Wheel Detergent

Lemon & Jasmine

Active Wheel BarLemon & Orange

Active Wheel BarLemon & Jasmine

Active Wheel Detergent

Lemon & Orange

Wheel Product Range

“Sabki Pasand Nirma”

“Super Nirma Se Mile Super

Safedi”

“HaathNaa

Jalein”

“Nimbu Ki Shakti Aur

Hazaro Phoolo Ki Khusboo”

Ad

Ad Ad

Ad

Nirma WheelS – SegmentationLow-End Segment, Rural Households(Basically all belonging to bottom of the pyramid)‘Sabki Pasand Nirma’T – TargetingNirma is spread across a huge market having an excellent distribution channel.Low Income and rural families.

P – PositioningNirma positioned itself as an affordable product between the people who could not afford detergents and for people who were looking for something more reasonable and added value for money.

S – SegmentationLow-end Segment Detergent, people from lower-middle class and poor class.‘Mehangi Wali Dhulai Budget Mein Samai’

T – TargetingLow income and rural peopleCustomers wanting fragrance

P – PositioningPositioned as a house-hold chorePowerful detergent with fragrance.

Nirma Wheel• Cost leadership strategy• Nirma chemicals was able to challenge the

might of Hindustan lever by pursuing this strategy by producing products more cheaply than Surf.

• At that time, it was sold at Rs 3.5 per kg while HUL’s surf was priced at Rs 15.

• The mission of Nirma was to provide better quality products at best prices

• Nirma is a very good example of fulfilling the unmet needs of the customers. Once you fulfill the unmet needs, you also get the first mover advantage.

• Differentiation strategy.• Nirma was already there in the market for many

years so the possibility of breaking the price barrier of Nirma ruled out and so also the place.

• Now the only thing left was the promotion by getting a Brand Ambassador / Celebrity Endorser and that’s what HUL did.

• HUL incorporated artificial fragrance into Wheel, with photographs of Lemon, Jasmine, Sandal etc. to make consumers believe that it contains real ones.

• Research picked up the insight that Nirma was not kind on hands because of its high soda ash content.

• "Maine maangi thi safaai, aur tu ne di haathon ki jalan" commercial, which took the battle straight to Nirma's turf.


Cost Leadership

Differentiation


Focus

Focus

Broa

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Nar

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Mar

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TIDE

Launched in 2000 in India as Detergent Powder.

One of the brands under P&G.

GHARI

Launched in 1987 in India as Low Cost, Good Quality Detergent Powder.

Brand under RSPL.

“Chaunk Gaye?” “Pehle Istemal Karein, Fir Vishwas Karein”

Ad Ad

Tide GHARIS – SegmentationMedium Level Income Segment, Soaps & Detergent.T – TargetingMiddle class women, washing clothes on their own. Middle class buyers who cannot afford premium products but aspire for equally good productsP – PositioningPositioned as a very good quality detergent offering superior whiteness, good odor, affordable price. An all round detergent possessing all the desired qualities of a detergent.

S – SegmentationLow-end Income Segment (Mass), Soaps & Detergent.T – TargetingLower middle class households in Tier 3 and Tier 4 regions. Also targeted people in rural areas in different geographies.

P – PositioningPositioned as a good quality product (compared to low-end products like Nirma and Wheel) but at a slightly higher price. A product that doesn’t impair ‘Kismat ki rekha’.


Cost Leadership

Differentiation


Focus

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Mar

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This is not the End, my friends.

Let’s have a quick summary on Porter’s Generic Strategies.

Cost Leadership

Differentiation


Focus

Focus

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Porter’s Generic Strategies (with respect to competition and price segment)

Cost Leadership

Differentiation


Focus

Focus

Broa

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Mar

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Porter’s Generic Strategies (in overall Detergent Industry)

Perceptual Map (Above discussed brands)High Price

Low Price

High Quality

Low Quality

References• http://www.icmrindia.org/free%20resources/casestudies/The%20Nirma.htm

• http://mba.mit.asia/waves-2014/Success-Story-of-Nirma.pdf

• https://www.surfexcel.in/laundry-products/

• Market Research Report on DETERGENT INDUSTRY IN INDIA (By NPCS) [PDF]

• Indian Consumer Laundry Study (By Dupont) [PDF]

• Porter’s Five Forces Model and Porter’s Generic Strategies (multiple sites)

• http://consumeraffairs.nic.in/WriteReadData/userfiles/file/DetergentPowders.pdf

The EndThank You

detergent wars in india (surf excel, ariel, nirma, wheel, tide, ghari)

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