Nirma success story

Read the caselet carefully and answer the following questions:

1. 1.         The phenomenal success of Nirma can be attributed to its unique marketing mix strategy. Discuss the company’s marketing mix.

1. 2.         The changing environment led Nirma to foray into various product categories and also diversify. In what terms has Nirma been a pioneer and what are the threats and opportunities for the company?

Aided by an aggressive pricing strategy and apt product positioning, Nirma has managed to carve a niche in the lower end of the detergents segment. Buoyed by the success in the detergent ma rket, the company ventured into the toilet soap segment. It plans to enter the vacuum salt and shampoo segments in a big way.

The Nirma success story is a result of its founder and Chairman, Dr. Karsanbhai Patel's relentless focus on quality, cost and value. The distribution model, sustained line extensions and umbrella branding strategies have enhanced the brand's cost leadership. Today, the company's two brands, Nirma and Nima, are distributed through more than two million retail outlets across the country. To make inroads into personal care products, Nirma has to tap chemists, paanwalas and other retailers in addition to its regular two million retailers.

Since the launch of Nirma detergent powder in 1969, the Nirma portfolio has expanded to include fabric care products, personal care products, food products, packaging and chemicals. This was primarily to cater to the changing business environment. The company has a significant presence in the detergent powders, cakes, toilet soaps as well as in the scouring bars category. However, the underlying philosophy remains consistent - to deliver value-for-money products to consumers.

In the fabric care category, Nirma has three products for the lower-end market - Nirma yellow washing powder, Nirma detergent cake targeted at lower income consumers and in the mid-priced segment, and the super Nirma washing powder, which successfully debunked the myth that high quality products had to be high-priced. The powder is 40% cheaper than its nearest competitor. The blue colored super Nirma detergent cake was introduced in 1990 to make consumers shift from the then available detergent brands. The Nirma clean bar was launched to enable users of unbranded detergent powders and cakes to switch to a value-for-money branded product.

Nirma's foray into the toilet soaps category was launched with Nirma Bath Soap, a carbolic soap which positioned itself against the largest selling carbolic soap brand, Lifebuoy, from the Hindustan Lever stable - at half the latter's price. The more up market Nirma beauty soap with four perfume variants, also became an instant success and is the third largest selling brand in the country, today.

Nirma lime fresh soap was launched as a mid-priced toilet soap without any advertising support. In the first month of its launch, seventeen million packs were sold, vindicating the company's belief that value-for-money products are what consumers are looking for. The product sells for half the price of its nearest comparable rival. Nima Rose and Nima Sandal are the other toilet soaps that are on offer in the mid-priced category.

Apart from these consumer products, the company also sells a number of industrial products, all of which conform to the Nirma philosophy of better products, better value, better living.

There are many challenges for Nirma considering that the detergent market shrunk 9 percent in volume terms, and the toilet soap segment recorded a decline of 12 percent in value terms, in 2001. Hindustan Lever, Nirma’s key competitor, is also bettering Nirma at the price-competitive strategy for the more volumes game. To combat these challenges Nirma has forayed into the foods category with the launch of Nirma Shudh Salt in 2002. Nirma Shudh is only the second