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