Strategic Thought Transformation - The IIPM Think Tank

C A S E S T U D Y
majority of Indian households; but having
understood that, Nirma introduced the
same generic product with a lower price
tag, which automatically catapulted it to
the position of a ‘substitute’ brand for
HLL’s Surf and P&G’s Ariel & Tide. And
today, Nirma holds about 28% of the total
detergent market in India (2005) with
revenues of about Rs.20 billion!
Also to be noted is the fact that the positioning
of Nirma as a harmless product
was also not all that difficult due to its
environment-friendly and phosphate-free
formulation. It was this feature which
made users of other brands shift over to
Nirma and lending a deaf-ear to what the
marketers would call ‘brand loyalty’.
Expansion of its brand portfolio:
After attaining major success in the detergent
powder market, Nirma expanded
its basket of brands offered and gave
something new to its customers. They
launched the Nirma detergent cake in
1985, which surprisingly came after a real
long sixteen years after its first product
was launched! This move worked wonders
for Nirma and elevated its image in
the consumers’ mind, thereby enabling
it to erode
The little girl in a
frock swirling to
the tune of the
jingle became an
evergreen brand
ambassador and
will ever be fondly
remembered by all
its competitors’ market shares.
These marketing and branding strategies
made it hard to breathe for its colossal
competitors and even successfully
disturbed the advertisement budget for
Hindustan Lever Limited (India’s largest
FMCG Company), which then adopted an
offensive marketing strategy with the introduction
of the low-priced Wheel – a
brand meant to cater to the lower-middle
class and economy segment – to bounce
back into the Indian detergent market
and counter Nirma’s popularity in the
rural and sub-urban market.
And then came another shocker from
Nirma’s stable – while HLL was tied-up
concentrating and delving over how to
counter Nirma’s onslaught, Nirma Consumer
Care Limited had already planned
a strategy to breach into HLL’s prized
territory of beauty soaps – and Nirma
beauty soap came about, which again
gnawed hard into Lux and Lifebuoy’s
market-shares.
Crystal-gazing into the future...
But then again, when we think about
the gala time Nirma seems to be having
after having bedazzled the Indians,
there are innumerable local players closing
in even on the likes of every major
player – including Nirma. Now imagine
this. According to Lotus Strategic Consultants,
the product category of detergents
alone is studded with over 10 assorted
brands in each Gujarat town, whether big
or small! And the situation is no better
across India as a whole. The unorganised
players all across India, according
to their research, turned out to be an
alarming 7-10%! With detergent-making
being accepted as almost a ‘backyard
activity’, the capital outlay essential to
kick-off the cleaning business is not a
tough ask. And that perhaps is the very
reason why a number of smaller local
aspirants have tried to emulate Nirma,
perhaps even emulating the product and
packaging features with their ‘look-andsound-alike’
products flooding the rural
and semi-urban Indian markets, where
consumer education is paid no heed to.
Another threat is the increase in consumer
spending, which has resulted in
intense competition from the big boys.
This further enhances the advertisement
spend obligatory on the part of the players
to protect their market share. Moreover
with rural marketing being understood as
an important effort for survival, Nirma’s
dominance in the rural and semi-urban
areas appear threatened and delicate.
Added onto this, in this era of freebies,
cash and trade discounts (which have become
the order of the day) and increased
promotional activities, it is Nirma which
could well find itself on the wrong side of
the cleft if it does not appreciate this not
so sublimal change in competition!
Be it Nirma’s advertising campaign
with the popular ‘little girl with the white
frock’ dancing to a jingle or just its ‘local
nature’ competency coupled with its
strong distribution strategy, Nirma has
always proved to be an example of what
can be done with meagre resources! But
with markets growing beyond the traditional
urban, the modern world sees
even technology & telecommunication
industries concentrating on the rural
market, what to say about detergents.
Nirma surely is at a crossroads, facing
the same strategies from smaller competitors,
which they themselves had utilised
against the larger players. The rules of
yesterday are no longer the ones that
define success anymore...
78 STRATEGIC INNOVATORS
An IIPM Intelligence Unit Publication