Chapter #4 : Why Nirma Failed??

Hema, Rekha, Jaya aur Sushma….Sabki Pasand Nirma!! –Indeed, the jingle is still afresh in our minds, and whenever we come across it, we don’t really read it, we sing along ---just like you did it now!! The story today is about one of the most successful and celebrated indigenous brands, which has not really failed, but is on top of the list of those endangered brands, that if not given any significant boost, might bid us goodbye soon!!

The Detergent Market:- 

• The detergent market is one of the segments of the FMCG market in India that is in maturity stage and still has high growth potential.
• The detergent consumption in India is less in comparison to the other Asian countries, but it is growing vigorously.
• The per capita detergent consumption in India is around 2.7 kg per year, whereas places like Philippines and Malaysia has per capita consumption at 3.7 kg, and in USA it is around 10kg. 
• Reports show that India’s per capital consumption of detergent stands at 2.7kg – the lowest in the world.

The detergent market in India is divided into three segments – premium, mid-range, and popular. The market share of the detergents in the premium segment is 15%, and that of the mid-range and popular are 40% and 45% respectively.

• The premium segment comprises Ariel and Surf;
• The mid-range segment comprises Tide, Henko, and Rin; 
• The popular segment comprises Mr White, Wheel, Nirma and Ghari.
• Today, Ghari is the market leader in the detergent industry, with a market share of 17.3% and Wheel is tagging behind closely at 16.9%.
• Within the economy segment, both Ghari and Wheel are priced similar.
• Tide is at present at the third position with a market share of 13.5%
• Nirma has less than 6% market share.

A Successful Past:-

• Before 1985, Hindustan Unilever’s Surf held the number one position in the detergent market in India. However, when Nirma Chemicals launched a detergent brand called Nirma, catering to the middle and lower middle class customers, Surf was evicted from its number one position.
• The founder of Nirma Dr Karsanbhai Patel made and sold the detergent powder using market penetration strategy by selling the powder at Rs3.5 per kg when cheapest detergent powder was available at around Rs13 per kg.
• It rapidly became popular in the rural market and acquired the status of a beloved “Low-cost value-for-money” household detergent in the minds of the consumers.
• The performance of Nirma during the decade of 1980s has been labeled as ‘Marketing Miracle’ of this era.
• In the 90s, the popularity of the brand made it attain 15% of market share in India while Surf was the undisputed champion of detergents with 65% market share and targeted premium segment.
  
• Nirma, despite being a household name for detergents, started manufacturing beauty soaps and widened its portfolio by introducing salt, soda ash, and scouring products.

Other Business:-

• Apart from the detergent sector NIRMA also has a CEMENT business by the name “NIRMAX”.
• Nirma acquired Lafarge India Cement Assets for $1.4 Billion. 
• Nirma acquired another big company Emami cement in Feb,2020 

Marketing Mistakes:-

Innovation:-

•  Nirma, despite being a 17 billion company started losing its market share to the unbranded competitive rivals.
• It failed to retain the interest of the consumers as low-cost products would not work anymore since customers started perceiving such products as cheap.
  
•  They slowly tried to introduce Nirma blue and Nirma cake but could not differentiate the product and its positioning.

Diversification:-

• Unfortunately, the growing income level of Indian consumers made them perceive Nirma as an inferior brand.
• While other brands went viral with their unique advertisement campaigns and diversified product lines, Nirma followed the same campaign and failed to penetrate into the premium segment.

Consumer Perception:-

• The reason why NIRMA was hailed by the customers, was the same reason why it is getting cornered today.i.e The Cheap Sentiment.
•  Consumers perceived Nirma as an inferior brand as its products were available at a low price.
• Nirma failed to understand what they were good at!!!