The Detergent Market Now

The detergent market in India can be divided into

premium (Surf, Ariel), mid-price (Rin, Henko, Tide)
and popular segments (Ghari, Wheel, Nirma, Mr.
White). They account for 15%, 40% and 45% of the
market share, which is 60% of the total market.
Regional and small unorganized players still account
for the 40% market.
Per-capita consumption of
detergent in India at 2.7 kg is
the lowest in the world.

War to wash
Calm Before the Storm
1956-57 : A local private sector firm, Swastik
manufactured a powder called DET &
Hindustan Lever Ltd (Then HLL) was test
marketing SURF, which it began manufacturing
in 1959. Det was successful in Eastern India
but with time, Surf became the market leader
nationally.

Till
In 1980's Surf suffered huge losses at the
hands of a new and small firm, Nirma
Chemicals..
Nirma Nimble Newbie
Humble Beginning

In 1969, Karsanbhai Patel (Patel)
2
, a chemist at the Gujarat
Government's Department of Mining and Geology
manufactured phosphate free Synthetic Detergent Powder,
and started selling it locally.
Patel hand-mixed the chemicals in batches & then
packed it into gunny bags.He started packing the
formulation in a 10x12ft room in his house.

Nirma Nimble Newbie
The new yellow powder was priced at Rs. 3.50
per kg, at a time when HLL's Surf was priced at
Rs 15. Soon, there was a huge demand for
Nirma in Kishnapur (Gujarat), Patel's
hometown.

Patel named the powder as Nirma, after his
daughter Nirupama.

Nemesis Named Nirma
Started with door to door delivery- reached up
to 200kgs a day
Was sold in poly bags, as compared to surf s
significantly expensive cartons
Positioned as a cheaper alternative to Surf and
as a superior product compared to inferior
washing soaps
Aimed at the unorganized laundry soap
market in the urban and rural areas

Newbie to Numero Uno - Product
Nirma's core marketing thrust revolves around
prompting consumer trials by offering a good
quality product at most competitive price and
retaining these new consumers by
continuously offering the same 'Value For
Money' equation.
This is borne by the fact that today Nirma can
boast of a strong brand loyalty from its 400
million consumer base.

Newbie to Numero Uno - Product
Based on the pragmatic concept of 'Umbrella
Branding', Nirma has been increasingly
successful in extending its brand equity to
other product categories like Premium
Detergents, Premium Toilet Soaps, Shampoos,
Tooth pastes and Iodized Salt, thus opening
new vistas to the field of Brand Building.

Newbie to Numero Uno - Price
For harried housewives, struggling to balance
their monthly budgets, Nirma came as a
boom. It was much cheaper than Surf, which
had already gone well out of their reach; and
it washed clothes nearly as well. Its cleansing
power was far superior to that of the slabs of
cheap washing soaps that had been their sole
alternative until then.
Newbie to Numero Uno Cost
Saviours
Nirma operated in the small-scale sector and,
therefore saved an enormous amount of
excise duty that multinationals had to pay on
every kilo of detergent produced. The latter
simply could not hope to bring the price down
to a level that was attractive enough for the
middle and lower-middle classes, which were
the bulks segments for Nirma sales.
Newbie to Numero Uno Cost
Saviours
Till 1985 the Nirma ingredients were simply
mixed by hand thus requiring neither
machinery nor capital investment. Due to the
scale of his product and the simple non-
mechanized production process, Nirma gained
a number of tax and excise benefits for not
using electricity. Since Nirma was a small-
scale local venture, they did not have to pay
excise duties that were levied on
multinationals.

Newbie to Numero Uno Cost
Saviours
Another area where Nirma saved millions was in
labor costs. Being a cottage industry Nirma was
not compelled to abide by minimum wage rules.
Payment was made according to work done and
since labor was not permanent no additional
overhead for benefits etc. needed to be paid.
In 1989 Nirmas labor costs for 8000 workers was
estimated to be between Rs 15-20 per person day
in comparison to HLL who paid their semi-skilled
workers approximately Rs 30-40 per person day.

Current Cost Control
To keep production costs at a minimum, Nirma
sought captive production plants for raw
materials. This led to the backward integration
programme, as a part of which, two state-of-
the-art plants were established at Baroda and
Bhavnagar, which became operational in 2000.
This resulted in a decline in raw-material
costs.
Newbie to Numero Uno-Distribution
When setting up a distribution system Karsanbhai
was extremely aware of the importance of
keeping costs down.
Once demand for Nirma had outgrown his ability
to deliver on bicycle he moved on to vans and
then later to trucks.
Nirma had neither a field sales force nor owned
a distribution network. Karsanbhai negotiated
prices with truck and van suppliers on a daily
basis.

Newbie to Numero Uno-Distribution
As sales grew Karsanbhai eventually hired
stockists (those who stocked additional quantities
of the goods) as commission agents.
On the one hand it helped him avoid central sales
tax and the stockists were responsible for all
transportation, octroi, handling and delivery
costs.
There was also a strict system of protocol and
distribution depended on prepayment for stocks
so as to minimize risk for Nirma.

Elimination Of Intermediaries
The product goes directly from the factory to
the distributor.
The company maintained depots in states like
Andhra Pradesh, Tamil Nadu and southern
Karnataka, as getting stocks to these areas was
sometimes difficult.
In states like Uttar Pradesh and Madhya
Pradesh, stocks were delivered directly from
the plants.
An order is placed and the truck leaves
straightaway. It is like a current account. We
send the stock, they send the money."
- Hiren K Patel (Hiren), CMD,
Nirma Consumer Care Ltd.
Target -> Mass Acceptance
Patel hired young women, who would visit retail shops
in Ahmedabad, asking for Nirma. The effect was
immediate, that shopkeepers now readily accepted
Nirma.

-Nirma announced Prize draws offering winners huge
sum of money like 30000 & rs.50000 (enormous in that
time).

- Nirma was the only Indian brand other than SBI, as a
sponsor to Moscow Olympics in 1980.


Early Reaction
In the early 1970s, when Nirma washing
powder was introduced in the low-income
market, Hindustan Lever Limited
(HLL)
1
reacted in a way typical of many
multinational companies. Senior executives
were dismissive of the new product: "That is
not our market", "We need not be
concerned."

Nemesis Named Nirma
By 1985, Nirma washing powder had become
one of the most popular detergent brands in
many parts of the country. By 1999, Nirma
was a major consumer brand offering a
range of detergents, soaps and personal care
products. Nirma's network consisted of about
400 distributors and over 2 million retail
outlets across the country.
Let the War begin

-From 1986,HLL had woken up & decided to
stop Nirma. Made a STOP NIRMA strategy-
codenamed- STING (Strategy to inhibit Nirma
Growth)

Choice of Aggression
1. Aggressive advertising
Creating a jingle that connects to the market
A new fresh advertising campaign
Guerilla advertising
IMC
New agency: new ideas, new creative

Choice of Aggression
2. Decreasing price of existing product
Nirma consumers received acceptable quality in lieu of
low price
HLL COULD possibly follow this way.
Launch a new cost competitive product as compared to
Nirma
Tap markets which were unexplored by Nirma
Nirma was popular in Gujarat in 1980s
Was gaining on markets as yet unexplored by Surf (middle
to lower classes, rural)
Surf could have adopted various measures like price
decrease to appeal to rural markets

Choice of Aggression
3. New Promotion tactics along with
advertising
Some amount extra with pack
Free items (buckets etc)
Produce sachets
Stick sachets in magazines and newspapers
What HUL did ?

1. Cost Reduction: decided to sell Surf in
polybags as against its previous expensive cartons
2. Revamped its advertising
Earlier, Surfs campaign ads were always used to
establish Surf washes whiter.
In 1985, HLL created a character called Lalitaji,
potrayed by TV artist Kavitha Chowdhary. Lalithaji
represented a smart housewife who knew that
good value always comes at a price.

What HUL did ?

3. Launch of Sunlight
Then launched a white detergent powder
called Sunlight in 1985
priced to match Nirma
targeted the eastern and southern markets
where Nirma was not very strong

What HUL did ?

4. Launch of Wheel
R&D department of HLL was given the
responsibilty of producing a low-cost detergent,
which gave better performance, at the same
time, without any side-effects like ones caused by
high soda-ash content in Nirma.
1986: developed a NSD(non-soap detergent):
Wheel
launched as a detergent bar too to counter
Swastiks Super 777

What HUL did ?

5. Packaging in 30 grams plastic sachets
Wheel Detergents powder was packed in 30-gram
plastic sachets, instead of usual one-kg packs. It
was priced at Rs. 5.50 as against Nirmas Rs. 5.25.
6. Advertising strategy
Campaigns emphasized that Wheel provided
extra power, extra lather and was safe on hands
and clothes.
aimed at creating dissonance in the minds of
Nirma buyers about the safety aspects and the
benefits of switching over to Wheel.

New Battlefronts
In the mid-nineties, Nirma successfully extended
its brand to other product categories like
premium detergents (Nirma Super Washing
Powder and Detergent Cake)
premium toilet soaps (Nirma Premium, Nima
Sandal, Nirma Lime Fresh).
In 2000, the company entered the hair care
market with Nirma Shikakai, Nirma Beauty
Shampoo, and Nirma Toothpaste.
Soaps Segmented by HLL, Attacked
by Nirma

HLL had segmented the soap sector by price,
by scent appeal, and by brand personality.
So, Nirma positioned
Nirma Bath against Lifebuoy,
Nirma Beauty Soap against Lux,
Nirma Rose against Breeze,
Nirma Lime against Jai Lime.
With some twists
Nirma noticed that North Indianspreferred
pinks soaps and while the South Indians
preferred green ones. Sandal soaps were more
popular in the South.
. The advertising spend of the company was
very low, as compared to other FMCG
companies. Nirma spent only 1.25-2% of its
turnover on advertising as compared to the
normal 6-10%
Ad Campaign
Nirma always preferred to place the product
on the shelves first, receive feedback, and
then create an enduring ad campaign.
For endorsing soaps, the company used
starlets like Sangeeta Bijlani, Sonali Bendre,
and Riya Sen, who were relatively unknown at
that time. The advertisement messages were
also very simple and focused on the benefit of
the product.
Current Trends
Ghari Detergent Powder
has crossed Wheel, as
the most preferred
detergent.
HUL is still the overall
market giant with
Wheel, Rin and Surf
(one product for each
segment) doing well.
Nirma has market share of less than 6% now