Success Story of Nirma

A Case study on Karsanbhai Patel

His is a legendary
rags to riches journey
during which he
shattered established
business theories and
rewrote new ones.

● ● ●

Karsanbhai Khodidas Patel (K.K.Patel) is a befitting example of a self made man.

Coming from a humble farmer family he understood the need of the masses to serve
a segment that was neglected but at the same time highly profitable. He established
a position for his firm in the lower income segment of the detergent market,
overtaking many heavy weights and multinationals, to emerge as a winner.
Literally, he made money by washing others’ dirty linens. He is the founder of the
powerful brand ‘Nirma’ which he aptly positioned using all the 4 P’s of marketing
(viz. product, price, place and promotion) to his advantage.

● ● ●

Submitted to: Submitted by:

Madhusudan Partani
Dr. Anita Tripathi Lal FMG-18A
91029
K arsanbhai Patel was born into a
farmer family in a small village
called Mehsana, North Gujarat in
the year 1945. Karsanbhai finished his B.Sc.
speech marks as said by Mr. Patel clearly
exhibits the
entrepreneur,
situation may
quality of
that
be,
is
a
whatever
whatever
successful
the
the
in Chemistry at age 21 and worked as a lab circumstances may be, the passion and the
technician, first in the New Cotton Mills, fervour can never be curtailed.
Ahmedabad, of the Lalbhai group and then
“The lack of any such precedent in my
at the Geology and Mining Department of
family made the venture fraught with fear
the Government of Gujarat.
of failure. But farmers from North Gujarat
Entrepreneurship was in his blood and in
are known for their spirit of enterprise”
1969, at a young age of 25 he embarked on
a life changing journey which catapulted Though he was not from a entrepreneurial

him into a mastermind businessman. He family, though no one in the family earlier

addressed the needs of millions of Indian to him dealt into any venture, thus were

consumers who had no choice but to kneel very highly risk averse and had a fear of

before the limited number of options of failure. But the zeal of the venture has
high cost detergents available in the Indian never allowed the circumstances to thwart
market. his vigour and verve.

He launched the brand “Nirma” named Karsanbhai set up shop at small workshop

after her daughter Nirupama, in the year in an Ahmedabad suburb. The Nirma brand

1969. This was an after-office business the quickly established itself in Gujarat and

one-man company would bicycle through Maharashtra.

the neighbourhoods selling handmade
The launch of ‘Nirma’ detergent powder
detergent packets door to door. But later
was special in many respects. It was made
on, after the 3 years of firsthand
from an indigenous formula, without using
experience with the customer by having a
phosphate, which was environmentally
direct contact with them, he felt very
friendly and not used by any existing
confident in quitting his job. This shows
detergent company. This made the
how enthusiastic and also how passionate
competitors sit up and take notice of
he was in his dream venture. The following
‘Nirma’. Also the detergent was launched products at affordable prices and thus
at a low price of Rs 3/kg whereas the next creating good value for the consumer’s
cheapest detergent at that time was Rs. money.
13/kg. The use of penetration pricing
The high quality and low price of the
worked for ‘Nirma’. In terms of
detergent made for great value. Fuelled by
distribution, Karsanbhai Patel started the
housewife-friendly advertisement jingles,
route of door to door selling which was an
Nirma revolutionized the detergent
effective way to reach the target segment.
market, creating an entirely new segment
The advertising campaign of ‘Nirma’ uses
in for economy detergent powder. At the
the jingle “Doodh Si Safedi Nirma Se Aayi”
time, detergent and soap manufacture was
is so popular among the masses, using the
dominated by multinational corporations
purity and colour of milk to symbolise the
with products like Surf by Hindustan Lever,
power of Nirma in a metamorphic manner.
priced around Rs. 13 per kg. Within a
Nirma became a huge success and all this decade, Nirma was the largest selling
was a result of Karsanbhai Patel’s detergent in India. Since production was
entrepreneurial skills. labour intensive, Nirma also became a
leading employer (employing 14,000
Karsanbhai Patel had good knowledge of
people 2004). Made without some
chemicals and he came up with Nirma
phosphates, Nirma was also somewhat
detergent which was a result of innovative
more environment friendly.
combination of the important ingredients.
Indigenous method was used ,and also the In the 1980s Nirma moved ahead of Surf, a
detergent was more environment friendly. detergent by HLL , to capture a large
market share. Nirma went on to become
Consumers now had a quality detergent
the largest detergent and the second
powder , having an affordable price tag.
largest soap company in India. Nirma had
The process of detergent production was
more than 35% market share in the
labour intensive and this gave employment
detergent segment and around 20 %
to a large number of people. Nirma
market share in the toilet soap segment.
focused on cost reduction strategies to
The company got listed on the stock
make a place for itself in the market. Nirma
exchanges in the year 1994.
has always been known for offering quality
Nirma adopted backward integration In 1995, Karsanbhai started the Nirma
strategy for the regular supply of raw Institute of Technology in Ahmedabad,
materials, 90 % of which they manufacture which grew into a leading engineering
themselves. Nirma also gave due college in Gujarat. An Institute of
importance to modernization, expansion Management followed, with the entire
and up gradation of the production structure being consolidated under the
facilities. The company also made sure that Nirma University of Science and
it uses the latest technology and Technology in 2003, overseen by the
infrastructure. ‘Nirma’ Education and Research
Foundation. To produce more such
Karsanbhai Patel was an opportunist. After
extraordinary entrepreneurs, the
establishing its leadership in economy-
Nirmalabs education project was launched
priced detergents, ‘Nirma' entered the
in 2004, aiming at training and incubating
premium segment, launching toilet soaps
prospective entrepreneurs. This prepares
‘Nirma’ Bath and ‘Nirma’ beauty soap, and
aspiring entrepreneurs to effectively face
premium detergent ‘Super Nirma’
the different business challenges. Nirma
detergent. Ventures into shampoo and
also runs Nirma Memorial Trust ,Nirma
toothpaste were not as successful, but the
Foundation and Chanasma Ruppur Gram
edible salt ‘Shudh’ is another success story.
Vikas Trust as a part of their effort as a
‘Nirma’ beauty soap is one of the leading
socially responsible corporate citizen.
toilet soaps, behind Lifebuoy and Lux.
Overall, ‘Nirma’ has a 20% market share in
soap cakes and about 35% in detergents.

As far as Corporate social responsibility

(CSR) is concerned, Nirma has made some
good efforts by starting Nirma Education &
Research Foundation (NERF) in the year
1994 for the purpose of running various
educational institutes.
Awards and Accolades

 In 2001, Karsanbhai was awarded an honorary doctorate by Florida Atlantic

University, recognizing his exceptional entrepreneurial and philanthropic
accomplishments.
 In 1990, the Federation of Association of Small Scale Industries of India (FASII), New
Delhi, awarded him the 'Udyog Ratna' award.
 Honorary Doctorate by Devi Ahlya University, Indore
 The Gujarat Chamber of Commerce felicitated him as an 'Outstanding Industrialist
of the Eighties'.
 He has served twice as Chairman of the Development Council for Oils, Soaps and
Detergents.
 Dr. Karsanbhai Khodidas Patel has been conferred with Padma Shri Award for the year
2010. The award will be formally conferred by the President of India Mrs Pratibha Patil.
 References
“Business Personality- Karsan Bhai K Patel,” A Presentation by NIRMA University
http://www.nirma.co.in/genesis.htm visited on 11th, 13th and 15th July, 2010
http://www.businessblog360.com/2008/04/25/karsanbhai-patel-and-the-success-
of-nirma/ visited on 12th July, 2010
http://www.iloveindia.com/indian-heroes/karsanbhai-patel.html visited on 11th
July, 2010.
http://en.wikipedia.org/wiki/Karsanbhai_Patel visited on 15th of July, 2010