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The Nirma Story

a dynamic phenomenon, a philosophy,

a revolution that changed our lives!Prateek chhabra (16) Amit rai (10) Kulvinder pathania (27) Shubhangi chouhan (61) Ashish sonewane (29) Gaurav chouhan (57)

The Beginning.y

In 1969 Gujarati entrepreneur, Dr. Karsanbhai Patel, set up his first detergent-making unit in the backyard of his home in Ahmedabad 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 in polythene bags and then set off on his bicycle to sell the packets door to door. Every packet of Nirma that Karsanbhai Patel sold to his consumers came with a money back guarantee. The cost-conscious approach of the initial years was to evolve into a strategic perspective.

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Some FactsNirma is named after Nirupama daughter of Dr. Karansanbhai Patel y Dudh si safedi Nirma se aye, rangeen kapda bhi khil khil jaye Jingle used since last 35years y Same radio spot has been used consistently since last 28years y Nirma is one of the largest selling single detergent brands in the worldy

A different pathy Identified y Expanded y Achieved

new markets. markets where others failed

penetration where others felt consumers mind set could not be changed

Success Pathy Value

for money concepts y Rural focus y Flat, efficient, robust distribution network y Multi dimensional aggressive marketing and manufacturing strategy y Aggressive media strategy

Resultsy Value

for money concept y Washing habits changed y Widespread conversion from oil soap and soda ash to detergent powder y Size of detergent market in no time multiplied manifold y Single product brand

Present Scenario8 manufacturing locations. y Amongst top 10 Indian Brands. y Nation wide Distribution reach.yo 400 Distributors o 2000000 Retailers o 40 Depots

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Strong human resource base consisting of 14000 employees and 500 professionals.

RecognitionThis brand had been ranked as the Most widely distributed detergent powder brand in India as per All India Census of Retail Outlets carried out in 435 urban towns by the AIMS (Asian Information Marketing & Social) Research agency [Brand Equity - The Economic Times, March 11, 1997]. y 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]. y 9th among Top FMCG brands of India ( A& M MODE2002)y

ProductsDetergents: Spray dried powder, Compact dry mixed, Cakes y Toilet Soaps: Beauty Soaps , Carbolic Soaps, Premium Soaps y Packaged Foods: Iodized Salt y Industrial Products: LAB, Glycerin, AOS, Sulfuric Acid, Sodium Silicate, Soda Ash, Salt y Fertilizers: Single Super Phosphatey

Marketing Strategyy

Product Positioning: Nirma found its place between the expensive detergents and inferior washing soap slabs. The Nirma brand was quickly recognized in Gujarat and neighboring parts of Maharashtra and the rest is history. Pricing: Nirma transformed the face of Indian detergent market by staging the strength of low-cost detergent powder segment. The new yellow powder was priced at Rs. 3 per kg, at a time when HLL's Surf was priced at Rs 13. Distribution: Nirma targeted non-users of Surf thus avoided the attention of HLL and later grew rapidly and was unstoppable once it was in the right mode.

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Financial ReportPARTICULARS 2009-10 ( Cr.) 2008-09 (Cr.) SALES 3117.95 3030.17

PBT

276.32

118.33

PAT

237.94

93.43

* CURRENT SHARE PRICE -

219.15

Segme tatio of Deterge t market i I diaSegmentation Of Detergent Powder Market

Mi Premium Ariel, Surf Excel

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Mass Market Nirma, Wheel and Fena

Surf Excel Blue, Tide, Henko

Overview of Detergent Industryy y

Total detergent Market value- 13000 cr. Market Share29% 37% Hul Ghari P&G 16% 18% Others

*Others Henkel, Nirma and Fena

*Source: DNA 9th Sep 2010

4 AS of Rural Marketing

AFFORDABILITYOffered good quality product at unbeatable low prices y Price at almost one third to that of competitor brand of resulting into instant trail by the consumers y Cleansing power far superior to that of slabs of cheap cleaning soapsy

Breaking cost barriery

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.

AVAILIBILITYy

350 strong sales force, a distributor strength of 400 and a retail reach of over 1 million outlets Supply chain managementAdopted centralized packaging: Able to cut its inventory costs by 40 %. Adopted flat distribution system: Nirma was directly connected to distributors and no agents in between. Railway for bulk movements

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Strategy

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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. 1990 Glycerin \ 1994 Packaging \ 1995 Single super phosphate \ 1997 N Paraffin soda ash ,Industrial salt, Edible salt, Captive power point. Sustainable advantage Low cost labor Superior processes Mindset of cost-conscious consumer

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Marketing & Distribution

AWARNESS

Media MixOBJECTIVE Reach Geographical dispersed buyers METHOD USED Advertisement Radio Wall painting Vans/Trains Direct and Interactive marketing Personal Selling Expert Channel Changing Washing Habits. Product Demonstration Sales promotion Prize Draw Introduce bucket scheme to promote product hamper Money back guarantee promotion scheme

Promotiony

Nirma believes in advertising only after they have launched a product in place. Nirma's advertising has always focused on the value-formoney angle. In 1982 we witnessed the birth of the first film for the brand, with the 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 FMCG companies.

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Brandingy y

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Nirma followed its original marketing and pricing strategies in both economy 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.

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 for their beauty soaps y 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 y The jingle being a part of Nirmas communication, was rarely tweaked with the swirl of Nirma girl in a frock on the pack shot. y Other constants in a Nirma film included twirl of saris by models in outdoor locations.y

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In 2009 Nirma wakes up and decides to undergo a personality transplant. A whopping Rs1.5 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 the detergent, as well as use the legendary 'Washing powder Nirma' jingle.

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ACCEPTABILITYy Better

quality products y Cheaper in price y Easy availability y Value for money y Need fulfilled for lower and middle lower class

STRENGTHSSTRONG BRAND EQUITY BACKWARD INTEGRATION MARKET LEADERSHIP DISTRIBUTION NETWORK

WEAKNESSHIGH INTEREST BURDEN LESS PRESENCE IN PREMIUM SEGMENT LACK GLOBAL TIE UPS

OPPORTUNITIESEXPORTS ACQUISITIONS FOR STRENGTHENING ITS DISTRIBUTION TIE UPS ENTRY INTO OTHER CATEGORIES

THREATSMNCs COMING TO INDIA IN TOILET AND SOAP INDUSTRY EMERGENCE OF SMALL REGIONAL PLAYERS

Losing Business.. Business..Nirma suffers from the inability to innovate in the product categories y With rising incomes, consumers are now shifting from economy brands to aspirational purchases. y The rivals have products across all price points to mitigate the inputs cost effects while nirma is available in only one plank-Value for money.y

SuggestionsIntroduction of family pack y Introduction of liquid detergent y Attractive packaging y Incentives to distributorsy

Any Questions.