study of indian salt industry
Post on 27-Oct-2014
239 Views
Preview:
TRANSCRIPT
INDEX
NO.
CONTENTS PAGE NO.
01 RESEARCH METHODOLOGY
03
02 INTRODUCTION TO THE SALT INDUSTRY
08
03 EDIBLE IODISED SALT
15
04 PEST ANALYSIS OF INDUSTRY
19
05 FIVE FORCES ANALYSIS OF INDUSTRY
22
06 COMPETITIVE ANALYSIS
25
07 PROMOTIONAL CAMPAIGN IN EDIBLE SALT INDUSTRY
29
08 NIRMA INDUSTRIES LIMITED
31
09 SWOT ANALYSIS OF NIRMA SHUDH SALT
41
10 DATTA ANALYSIS
43
11 HYPOTHESIS
67
12 FINDINGS
73
13 SUGGESTIONS & RECOMMONDATIONS
77
BIBLIOGRAPHY
X
APPENDIX
Y
LIST OF THE GRAPHS A
2
LIST OF THE GRAPHS
NO.
TITLE PAGE NO.
01 USER OF THE IODISED SALT
44
02 USERS IN AHMEDABAD
45
03 DIFFERENT BRANDS OF SALT TO AREA 47
04 RANKING PREFERENCE 48
05 AVERAGE MEAN
49
06 USERS OF SAME SALT BRAND 50
07 FREQUENCY OF PURCHASE 51
08 NUMBER OF 1 KG PACKETS REQUIRED FOR 1 MONTH 52
09 PURCHASE DECISION MAKER 54
10 FROM WHERE YOU PURCHASE SALT 55
11 USER OF NIRMA SHUDH SALT 56
12 RANKING PREFERENCE FOR NIRMA SHUDH SALT 57
13 PRICE OF NIRM SHUDH SALT 58
14 INFLUENCER OF PURCHASING NIRMA SHUDH SALT 59
15 MEDIA USED 60
16 HAD RESPONDENTS SEEN TELEVISION ADVERTISEMENT? 61
17 AVAILABILITY DIFFICULTY 63
18 19 20 21
DO YOU LIKE PACKAGING EDUCATION LEVEL INCOME LEVEL PROFESSIONS
65
66
67
68
A
3
RESEARCH METHODOLOGY
Research Methodology is a systematic design, collection of data, reporting of data and findings relevant
to specific marketing situation that is faced by company with the paradigm in the market shifting, from
the product to consumer, their needs and preferences have become essential to the considered by the
producer today in the world of cut throat competition to be ahead in the race and to lead is required to
reach consumer first.
The NIRMA SHUDH SALT, which has newly relaunched in India. The sale of Nirma Shudh Salt is not
increasing rapidly that is the problem. Therefore, research problem is to identify the consumer preference
of edible (iodized) salt as well as the satisfaction level of consumer regarding the Nirma Shudh Salt and
what are the problems they are facing regarding the product.
4
OBJECTIVE OF THE STUDY
To study the Consumer Preference for Edible Salt
To study the Consumer Preference for Nirma Shudh Salt
To study the awareness about Nirma Shudh Salt
To know the brand awareness of Edible salt in different area of Ahmedabad and to illicit the
consumer opinion about price, quality, reasons for choice, brand satisfaction etc.
To study the purchasing pattern of Edible Salt.
To know the criteria preferred by the consumer at the time of purchase of edible salt
5
RESEARCH DESIGN
A research design is the specification of methods that producer wants to acquire from the market. It is the
overall operational patterned framework of the project that stipulates what information is to be collected
and from which sources and from which producer of this competitive environment.
Generally, there are basic three types of research design, Exploratory, descriptive and Casual research.
Here Researcher has taken Descriptive Research Design and the reason behind it is as follows: The
Descriptive Research Design is used when the researcher is interested in knowing the characteristics of
certain group. Here Researcher is interested in knowing the proportion of people in a given population
have behaved in a particular manner making projection of things or determines the relationship between
two or more variables. The objective of the study will answer who, what, when, where, and how of the
subject under investigation for consumers as well as retailers. It is therefore necessary that Researcher
will give sufficient thought for framing research questions and deciding the type of data to be collected.
DATA COLLECTION METHOD
1. PRIMARY DATA:
Using two methods, the data has been collected:
Observation:
The purpose of observation was to have a look on the actual condition of which brand of salt are used by
consumer. With the help of Retailers, Researcher have seen the consumer’s observation as actually, how
much and which brand of salt they are using at present? What is the purchasing pattern of consumer?
Questionnaire method:
The questionnaire is divided into two methods that is Structured and Non-structured Questionnaire
Method. Researcher have used the Structured-Non-Disguised Questionnaire that is the part of a
Structured Questionnaire. In that Method, the listing of question is a pre-arranged order and object
inquiry is revealed to the respondent. Researcher have done the pilot survey of 20 customers for checking
out validity of our questionnaire and then Researcher have finalized our questionnaire for the survey
purpose.
6
2. SECONDARY DATA:
Someone already collects these data and it is available for my present study. And the sources of the data
are as follows:
Internal sources:
Annual Report of NIRMA.
External sources:
• Magazine
• Newspaper
• Library books
• Web Sites
• Population List
SAMPLING PROCESS
Defining the population:
It is the aggregate of all the elements defined prior to the selection of the sample. It is necessary to define
population in terms of Element, Sampling extent and time. I have conducted a survey on the consumer to
know the preference and satisfaction level for Edible Salt users (especially Nirma Shudh salt) with
special reference to different areas of Ahmedabad. These specifications are as follows:
• Element: Buyer of Edible Salt.
• Sampling Size: 250 House Hold
• Sampling unit: Household respondents
• Sampling method: Stratified Convenient Sampling
• Sample size decision:
For using the stratified sampling method, I have divided the city according to the Zone wise. And
the Ahmedabad city is covered with many areas which are representative of the Ahmedabad as a
whole. I have chosen areas like Maninagar, Satellite, Vadaj, Saraspur, Meghaninagar, Bapunagar
and Naroda.
7
Hypothesis: A chi- square test for independence has been conducted for knowing the relation between the area and the
preference towards salts.
Ho: Preference towards salts and area are independent of each other.
H1: Preference towards salts and area are dependent of each other.
LIMITATIONS OF THE STUDY
The limitations of the study carried out are as follow:
This study is limited to different areas of Ahmedabad
I have considered the survey with only 250 households for knowing about consumer preference
about the Edible Salt in Ahmedabad.
The accuracy of the project and conclusion is totally dependent on the data collected and
analyzed.
The sample size is too small to predict the future growth of the edible salt industry.
8
Salt Industry Introduction
India is the third largest salt producing country in the world (after the US and China) with an average
annual production of about 148 lakh tones. In a very short period of time sufficiency was achieved (in
1953) and made a dent the export market. Since then, the country has never resorted to imports. Exports
touched an all time high of 1.6 million in the year 2001.
The per-capita consumption of salt in the country is estimated at about 12 kg, which includes edible as
well as industrial salt. The current annual requirement of salt in the country is estimated to be 60 lakhs
tones for industrial use. Caustic soda, soda ash, chlorine etc., are the major salt-based industries.
Besides about 15 lakhs tones of salt is exported every year. Sea salt constitutes about 70% of the total salt
production in the country. Salt manufacturing activities are carried out in the coastal states of Gujarat,
Tamil Nadu, Andhra Pradesh, Maharashtra, Karnataka, Orissa, West Bengal Goa and hinter land State of
Rajasthan. Among these States only Gujarat, Tamil Nadu and Rajasthan produces salt surplus to their
requirement. These three states produce about 70%, 15% and 12% respectively of the total salt produced
in the country and cater to the requirement of all the salt deficit and non-salt producing states.
Private sector plays a dominant role contributing over 95% of the salt production, while the public sector
contributes about 2-3%. The co-operative sector contributes about 8% whereas the small-scale sector
(less than 10 acres) accounts for nearly 40% of the total salt production in the country.
Salt Production
There are about 10107 salt works, mostly in small sector engaged in the production of salt. The total area
under salt production is about 5.0 lakhs acres. The salt manufacturing activities provide direct
employment to about one-lakh presons per day.
Distribution of Salt
Railways play an important role in transporting salt from three surplus states to the entire length and
breadth of the country. On an average, 55% of edible salt is transported by rail from production centers.
The remaining quantity moves by road and waterway.
9
Iodized Salt
With a vies to ensure universal access of iodised salt for the prevention and control of goiter and other
iodine deficiency disorders in the country, Salt Commissioner's Office has been identified as the nodal
agency for creation of adequate salt iodisation capacity, its distribution and quality monitoring at
production centers, under NIDDCP. Salt Department has granted permission to more than 878 salt
iodisatios units with an annual
installed capacity of 112 lakh tones so far.
Exports
Export of common salt and iodised salt is permitted under Open General License (O.G.L.). Salt is
exported manly to Japan, Philippines, Indonesia, Malaysia, Nepal, and Bhutan etc. India has, for the fist
time, exported 32,500 tonnes of common salt to the US during December 2002, creating a history of
sorts.
Liberalizatin and Simplification of Procedure
Following amendments to Central Excise and Salt Act, 1944 in 1996, de-licensing the salt industry and
salt Cess Rules, 1964 in 2001 and introducing self-removal procedure (SRP) instead of permit system for
payment of cess and removal of salt from salt factories, several registers have been discontinued or
reorganised.
When the Father of the Nation, Mahatma Gandhi strode purposefully alongside thousands across the
length of Gujarat in his historic Dandi March in 1930 to release the domestic salt industry from the
shackles of the Britishers, little did he anticipate that half a century later the same salt industry -- at that
time a mere 20 lakh tones of salt was being produced and salt was being imported to meet the domestic
demands -- would end up as a Rs 3,600 crore industry accounting for the world's third largest production,
averaging a whopping 14 million tones annually. Salt production encompasses an estimated area of over
4.8 lakh acres spanning the states of Gujarat, Rajasthan, Tamil Nadu and to a lesser extent, Andhra
Pradesh, Tamil Nadu, Orissa and West Bengal. The industry directly employs over one lakh salt laborers.
Salt is an essential commodity with inelastic demand. Planning of production targets, distribution of salt
and price surveillance, promotion of technological development, maintenance of standards, improvement
of quality of salt and promotion of exports are done by the office of the Salt Commissioner, Jaipur, India.
Per capita consumption of salt in the country is estimated at about 12 kg. Per head per annum, which
includes edible and industrial salt. Current annual requirement of salt in the country is estimated at 60
lakh tones for edible purposes (including animal consumption) and 60 lakh tones for industrial use.
10
Caustic Soda, Soda Ash, Chlorine, etc. are the major salt-based industries. The country is not only self
reliant in salt production but also exports about 10 lakh tones of salt annually over the past few years. Salt
is manufactured mainly by solar evaporation of seawater, sub-soil and lake brine. Sea salt constitutes
about 70% of the total salt production in the country. Salt manufacturing activity is confined mainly to
the coastal States of Gujarat, Tamilnadu, Maharashtra, Karnataka, Goa, Andhra Pradesh, Orissa, West
Bengal and in the Hinterland State of Rajasthan. Gujarat, Tamilnadu and Rajasthan are surplus in salt
production, producing about 72%, 14% and 11% respectively of the total salt production of the country
and cater to the requirements of deficient and non-salt producing States.
Salt works having an area of more than 10 Acres (including salt works set up by the co-operative
societies) are covered under the provisions of the Salt Cess Act, 1953. Salt works having an area up to 10
Acres set up by individuals or groups of individuals are exempted from the provisions of the Act. The
private sector plays a dominant role in the salt industry, contributing over 95% of the total salt
production, while the public sector contributes about 3-4%. The small sector (less than 10 acres) accounts
for about 30% of the total salt production in the country. There are also units in the co-operative sector.
The salt manufacturing season begins with the closure of monsoons i.e., by the 15th October and lasts up
to June next year coinciding with the onset of monsoon again.
COMMON SALT – PROPERTIES AND USES
Sodium chloride (Nacl) now called common salt is an example of the simplest type of chemical salt. a
molecule of common salt contains an atom of chlorine combined with 23 parts by weight of sodium to
form 58.5 parts of common salt., Rock salt is rarely found in an absolutely pure anhydrous state in which
it is colourless and perfectly transparent. In most rock salt, mines such specimens are considered
curiosities. In Wieliczka mine in Poland and in Khewra mine in the Punjab large masses of salt
containing over 99 percent Nacl are met with. In the Punjab mines we meet with salt of different colours
such as white, pink, darkish or red. The colour disappears when salt is crushed to powder. The colour of
seawater is affected by the percentage of salt in it; as the quantity of salt decreases, the colour changes
from blue to green. Salt is met with in any colours; white, pink, red, brown, greenish and grey. The red or
green colour is attributed to the presence of infusoria.
Salt is highly soluble in water, 100 parts of which dissolve 37 parts of salt. The specific gravity of such
solution 1:2, the specific gravity of salt crystals is 2.16. The smallest quantity perceptible to taste is 68
grains of salt dissolved in a gallon of water. Pure Sodium Chloride is not deliquescent. It, however,
absorbs moisture owing to the presence of magnesium chloride. Sodium Chloride melts at very high
11
temperature, at still higher temperatures it evaporates and at white heat it volatilizes forming thick clouds.
It does not diffuse much, even when masses of varying densities are super-imposed on one another.
Salt is fairly hard. there is no standard unit fixed for hardness. Geologists, however, compare the hardness
of minerals by a comparative table (Moh’s table of hardness) according to which the hardness of talc is
considered as one and that of diamond ten. According to this standard the hardness of salt is 2.5. Its
cohesion or power of supporting pressure is twice as great as that of bricks. Common salt is a crystalline
substance: crystals generally form cubes and sometimes they form octahedrons. The form of crystals
depends on temperature, state of rest or motion, length of time etc. Salt has a perfect cleavage. It splits up
readily in to planes parallel to the faces of the cubes of which it is composed.
Salt has acoustic properties as well that is to say; it is a good medium for the transmission of sound.
Workmen in a salt mine are able to signal by blows on the face of the rock. Salt possesses in a high
degree the power of staying decomposition in dead organisms and is the commonest of all preservatives.
Owing to this property it is an absolute necessity to the life of man and the higher animals. Salt water
trickling through the roof of a working also forms stalactites and stalagmites just as time-stone forms
them. In Khewra mine we meet with long hollow tubes of salt formed by the brine trickling drop by drop
through the roof.
Rock salt has many minerals associates with it: for instance, gypsum, sodium sulphate, magnesium
sulphate and magnesium chloride. In the Khewra mine, salt is found mixed with variously cioloured
clays, white pink, red, variegated gypsum beds, limestone, and magnesium sulphate. Bad salt is
associated with magnesium sulphate and good salt with calcium chloride. A cube foot of pure rock salt
weight about 25 to 27 kgs.
Common salt is a necessity of life. It imparts an agreeable flavour and improves the taste of food and is
used as a condiment. it may be interesting to know how exactly salt consumed in its natural or artificial
form functions in the human body. It is Iodised by infusion of minute doses of potassium iodide about
.02% as prophylaxis for Goitre Similarly, it is medicated with phosphates or other ingredients to regulate
the deficiencies in human system. Salt, in short, is a preserver health. Lord Lawrence, in his evidence
before the Select Committee on East India Finance in 1873, attributed the prevalence of murrain in the
Indian cattle to the want of salt in their food. It was used as chemical manure long before the Christian
era and its value was recognized throughout Europe. the ancient Hebrews applied it as a manure over
2,000 years ago in Palestine and so did that eminently agricultural people in Chinese and do still to this
day. The old Romans too used it as manure. In India its use in agriculture is rather looked on with
12
disfavour. Mr. Arthur Young, an outstanding figure in the history of English and even European
agricultural renaissance, considered salt of great value as fertilizer.
The use of salt in modern industries is equally or perhaps more important. A number of arts and
manufacturers of modern civilizations owe their existences to salt. In short, salt is indispensable to
industrial advance.
PRODUCTION
Scanty rains and draught like conditions in major salt producing States of Gujarat and Rajasthan resulted
in prolonged salt manufacturing season and thereby creating conditions for increases in salt production
after 2000.
With the increasing thrust on ionization of salt and to meet the quality needs of the industrial sector,
emphasis is being laid on the manufacture of quality salt. Up gradation in quality of the raw salt
manufactured from the solar salt works to cater the above requirement is undertaken in salt washeries and
refineries. Salt Department has registered 39 salt washeries/refineries so far, of which, 31 units have
commenced commercial production.
The country is also focusing on the export of the salt as the production is increased beyond the
consumption level of the Indian market.
DISTRIBUTION
Railways play an important role in the movement of salt from the three surplus salt producing states to
the far-flung areas of the country. About 66% salt dispatches from the production sources are by rail the
remaining by road and waterways. The Zonal Scheme formulated by the Salt Department in consultation
with the Railways and the state Governments ensures adequate supply to the consuming areas. During the
year 2001-02, no scarcity or abnormal price rise was reported in any part of the country. The companies,
which are prevailing in the edible salt market, have the advantage of effective distribution network
because it is one of the factors of making a success in the market.
LIBERALISATION & SIMPLIFICATION OF PROCEDURE
Cess on Salt is levied as per provisions of the Salt Cess Act, 1953, and the Rules made there under. With
a view to further liberalize and facilitate realization of salt cess from the salt manufacturers (erstwhile
licensees), the Government has introduced Self Removal Procedure (SRP) in place of consignment-wise
13
permits system for removal of salt from the Salt Factories vide Notification dated 4th September, 2001.
The concessions provided in the rate of Cess in the Salt Cess Rules, 1964 and subsequent amendment
made vide Ministry of Industry’s Notification dated 09.09.1981 still continue to be in force.
EXPORTS
Despite being among the largest producers of salt in the world, India has not been able to make a dent in
the international markets which is evident from the low volumes; our best export performance thus far
has been a miniscule 6.66 lakh tones in 1990.
The Indian salt industry has been singularly unsuccessful on the export front, despite India's salt probably
being the cheapest in FOB terms compared to other salt exporting countries. This is mainly due to the
high trade logistic cost which leads to interminable delays in the turnaround of vessels, which pushes up
the CIF value of Indian salt to unacceptably high levels. The inability of India to have a global presence
is also one of the main reasons for the prevailing glut conditions in the Indian market. Since the scope of
increasing demand in the domestic market is fairly limited, the only way to come out of the glut crisis is
by emphasizing on exports in a big way. Alarm bells are already ringing in the industry over the record
14.5 lakh tone salt production in 1998-99, which is expected to burgeon to around 16-18 million tones in
the current year.
While a mere two per cent of the country's salt is manufactured by the 11 public sector and joint sector
undertakings -- Hindustan Salt Works (Kharaghoda and Mandi), Experimental Salt Farm (Bhavnagar),
the Tamil Nadu Salt Corporation and Sambhar Salts-- a whopping 98 per cent is in the hands of the
private, co-operative and unorganized sector. But here again, the big corporate have a low presence with
the lion's share with the small and medium units.
According to the salt department statistics, in 1998-99 there were 2,752 recognized salt units as against
an estimated 6,408 unrecognized units in the country. The recognized salt manufacturers allege that these
unrecognized units not only supply sub-standard salt in the market but are also causing major revenue
losses to the government by evading cess and royalty payments.
India produces more salt than its domestic requirements. These apart, the industry is also finding it
difficult to keep its head above water on account of the drastic slump in demand for industrial salt by the
recession-hit domestic soda ash and caustic soda industries which are the main salt consumers.
Export of common salt and iodized salt is permitted under Open General License (O.G.L.) Salt is
exported mainly to Japan, Philippines, Indonesia, Malaysia, Nepal and Bhutan, etc.
14
Every day, each of the earth's 5.9 billion inhabitants uses salt. Annual salt production has increased over
the past century from 10 million tons to over 200 million tons today. Nearly 100 nations have salt
producing facilities ranging from primitive solar evaporation to advanced, multi-stage evaporation in salt
refineries.
Humans need salt to live. Prehistoric man obtained salt from the meat of hunted animals. When man
developed agriculture, salt was added to supplement the vegetable and cereal diet and the quest for salt
became a primary motivation in history. In the mid-1800s, salt's value as an important raw material for
the chemical industry was established when the Solvay process in Belgium converted salt to synthetic
soda ash. Salt is, today, the largest mineral feedstock consumed by the world chemical industry.
IODIZED SALT
With a view to ensuring Universal Access of iodized salt to eliminate goiter and other Iodine Deficiency
Disorders in the Country, the Salt Commissioner’s Office has been declared as the Nodal Agency for the
creation of adequate capacity for the production, distribution and quality monitoring of iodized salt at the
production centers under the National Iodine Deficiency Control Programme (NIDDCP). The Salt
Department has registered more than 940 units with annual installed capacity of 147 lakh tones.
15
EDIBLE IODIZED SALT
INTRODUCTION
The scenario on the edible salt front is not so grim thanks to India's burgeoning population. To some
extent, decrease in demand for industrial salt is being nullified by the increase in demand for edible salt.
An individual's annual requirement for salt has been pegged at 6 kg. Taking the country's present
population at 100 crores, the requirement for edible salt would be 60 lakh tones per annum. Despite a
burgeoning population and the corresponding increase in the demand for edible salt, it is clear that on the
industrial salt front, the industry has heavy odds stacked against it. As an industry observer sums up,”
What we need is not only large markets within the country only but outside too. And for this, the country
requires standardization of quality and concentration of supplies instead of the present scattered quantities
available with the small manufacturers. And an influx of technology as well. The sooner this is done, the
better it is for the health of the industry.
Competition is hotting up in the branded salt market with Tata Salt, the blockbuster brand of Tata
Chemicals Ltd, emerging as the market leader. Tata Salt has a market share of around 37 per cent while
its closest competitor, Annapurna from Hindustan Lever Ltd, is breathing down its neck with a market
share of around 35 per cent, a recent ORG-MARG retail audit revealed. The ORG-MARG retail audit
showed that the 15 lakh tones domestic branded salt market would witness stiff competition among
popular brands such as Dandi, Surya and Nature Fresh as they try to grab a comfortable share, each with
intensive marketing strategies and advertisement campaigns. The ORG-MARG figures revealed that
during the financial year ended March 31, 2002, on an average basis, Tata Salt grabbed a market share of
36.58 per cent, while Annapurna’s market share touched 34.46 per cent. DCW Home Products Ltd’s
Captain Cook (now with HLL) had 7.78 per cent market share and other brands such as Dandi, Nirma
Shudh and Natural Fresh had market shares of 0.97 per cent, 1.37 per cent and 0.14 per cent respectively.
In March 2002, the market share of Tata Salt touched 39 per cent, while Annapurna’s market share
during the same period was around 30 per cent. According to analysts tracking the industry, the recent
entrant to the branded salt category is Dandi salt. The brand is being advertised heavily on the regional
channels and it has managed to gain around 0.97 share of the branded salt market. However, they said
that the unbranded sector continues to control a sizeable share of the overall salt market in the country.
Meanwhile, sources said that Tata Chemicals has already initiated new efforts to involve and engage its
business associates in marketing and strategy processes to enhance the brand muscle of Tata Salt.
While Captain Cook is positioned on the basis of its unique selling point, the free-flowing nature of its
salt, Tata Salt is positioned on the purity platform and Annapurna is positioned on the health benefit
impact of the iodine content in the salt." Tata Salt, the first branded salt in the country, was launched in
16
1983, DCW launched its brand in 1991 and Hindustan Lever’s Annapurna was launched in 1996. Other
FMCG companies such as Dabur India and Marico Industries have also got a presence in the salt market,
though insignificant, with their brands — Nutra salt, a low sodium salt and Saffola Salt, which is a
mineral enriched low sodium salt respectively. Both the above brands are positioned on the health
platform and are priced at a significant premium to the normal salt brands.
EDIBLE SALT IS BETTER IN COMMODITY MARKET
The trend of commodity-to-brand is yet to gain pace. While performance of staple foods has been patchy
and has fallen short of expectations, one market that's remained on top of the heap and growing faster is
branded salt. Well, if there's one commoditised brand that has been outperforming others such as atta,
sugar, rice and staples, it is good old salt. Salt, sugar, atta - all are commodities but at very different
stages of evolution with different brand building drivers. And while the three segments are not entirely
comparable as products, in evolutionary terms, salt is ahead.
Take FMCG giant HLL. It was some four years ago that HLL, based on recommendations by McKinsey's
Food & Agriculture Integrated Development Action (FAIDA) buoyant report on the foods industry, had
decided to push mass consumed staples such as atta, salt and rice. HLL's projections - of a million tones
by year 2000-01 - have since fallen short with current volumes of salt and atta adding up to less than
half-a-million tones. While rice has been pulled back and atta has seen a fall in market share this year, the
eight-year-old Annapurna salt is not only doing well, but is profitable at that. According to ORG-
MARG's retail store audit data for April 2002, the size of the iodized branded salt market is estimated at
15 lakh tones per annum (by value, about Rs 500 crore), and is estimated to be growing at 20 per cent
annually. National brands take a 45 per cent share, and local brands account for the remaining 55 per cent
share of this market. Compare this with other branded commodities - while branded, packaged sugar is
estimated to be a 40,000-tonne market, industry estimates peg the size of the domestic branded wheat
market at roughly 1.8 lakh tones. Tata Salt continues to reap the early bird advantage, with a leading 39
per cent share of the national branded salt segment, and a 17 per cent share of the total iodized branded
salt market. HLL's Annapurna salt brand is estimated to have a market share of about 16 per cent. (DCW
Chemicals' Captain Cook, launched in 1991, was subsequently acquired by International Best foods,
which in turn was acquired by Unilever.) HLL continues to distribute Captain Cook salt, but the brand
isn't being pushed as aggressively. New entrant Nature fresh, from the Cargill Foods stable, claims to be
showing positive results. "Nature fresh salt, introduced in December last year, has been able to make
inroads, generating switch in brand preference from the top end of the edible salt market. Other
significant branded players include Marico's Saffola, positioned as a niche, low-sodium brand introduced
about four years ago, and Nirma Shudh, which isn't completely national yet. Meanwhile, another
ambitious entrant that's making waves within the branded salt category is Dandi, launched last October
17
by Surat-based businessman Suresh Aggarwal. The brand is threatening to shake up market shares of
established players in the category. Dandi has already grabbed a four per cent share of the market, which
amounts to Rs 44 crore by value. The marketing mix for Dandi has been bang on - attacking tea through a
grassroots level Rs 8-crore ad campaign which gave the brand instant recognition, ensuring retail push,
and cross-selling (giving away a saree free with purchase of Dandi salt - the Kunvar Ajay saree brand is
owned by the same group). In addition to kitchen salt, one segment that has remained the stronghold of
the Delhi-based Rs 700-crore DS Group is that of table salt. The table salt market is limited - estimated at
Rs 25 crore - and dominated almost entirely by DS Foods' Catch brand. Catch, introduced in 1987, is
available in 16 different products (including spices and variants such as pepper and black salt) in 100 gm
tabletop dispensers, and has its production base in Noida. Catch free-flowing table salt's performance is
satisfactory, but there are no plans to extend it to kitchen salt. The brand occupies a niche and is doing
well for itself. Table salt, for example, has less than one per cent impurity compared to 30-40 per cent
impurities in kitchen salt. Even the best quality kitchen salt would be having an impurity level of 15-20
per cent.
So why is salt on stable turf while performance of other branded commodities has been, by and large,
patchy and below expectations? One of the reasons why salt is outperforming other branded
commodities is to do with the life span of branded salt being longer. Apart from that, there's been an
effective `iodine deficiency campaign', owing to which the penetration of branded salt is about 20 per
cent nationally, compared to one per cent for branded atta and sugar. While salt has been branded for
some two decades now, it is in recent times that the branded salt market has witnessed the entry of
several players. The trend of branded atta is only a three-four year old phenomenon, and unlike salt and
sugar, branded atta has very limited shelf life and freshness is crucial to end product quality. Besides,
significant laddering benefits of branded atta haven't yet evolved. As for branded sugar, the story is just
beginning, with brands like Dhampure coming up and Amul planning to enter the category.
But what about brand loyalty? Do differentiators such as `free flowing', `iodized', `granular' and `vacuum
evaporation' actually influence brand purchases when salt remains a low-value, low-involvement product
with few differentiators of significance? While the consumer is swayed by a number of brands and
benefits, which indicates low brand loyalty, there is a preference for reputed brands and familiar names.
That's because salt is a habitual product and the consumer doesn't prefer frequent brand switches. The
Indian consumer is willing to switch among a set of preferred brands, depending on availability, personal
preference and product offering. Once a consumer gets a certain branded salt free with another purchase,
the housewives may just continue with the brand.
18
Of course, distribution muscle is key. Tata Salt penetrates semi-urban and rural markets through economy
pack sizes and forms and product development for newer, more `evolved' offerings. And Dandi already
reaches 1,000 towns, piggybacking on 1,150 distributors.
So where is the much-talked-about commodity to brand movement headed for? "It will happen and at a
much faster pace now than before, due to the consumer's consistent quality demands and improving
supply chain of produce from farms." "The commodity market will progressively move into the branded
portfolio as long as the `value delivery' is in line with the product price. Margins will continue to be thin
till the consumer's perception of the differentiated values that brands offer over commodities changes
significantly.
19
PEST ANALYSIS OF INDUSTRY
Whichever the industry is, the political, economical, social & technological environment plays an
important role. These factors are the factors, which will influence the industry as a whole that means any
company cannot ignore the PEST for their further development. Following are some of the factors that
are influencing the edible salt industry.
POLITICAL/LEGAL FACTORS
Government has imposed a ban on non-iodized salt that means more market for the iodized salt in
the edible salt segment.
It is when a legion of 70 million goiter-affected people stand as a pointer to the magnitude of
iodine deficiency in the country that the Center has made a move to withdraw restriction on sale
of common edible salt.
Though de-licensed in 1996, the government retains a modicum of control over the industry. It
controls leasing of all Central Government land for salt manufacture along with planning the
production targets.
The Government has adopted the Universal Salt Ionization Programme under the aegis of the
World Health Organization.
The Central Government also supervises equitable distribution, monitors quality and prices,
ensures maintenance of standards and improvements quality and promotes technological
developments along with training of personnel. The salt department is under the purview of the
industry ministry and is responsible for collecting the salt cess, assignment fees, ground rent and
other dues.
On the welfare front, the government acts as a nodal agency for planning, formulating and
monitoring development and the labour welfare schemes. And if the issue is one of loss of
employment of some small-scale producers of salt, the solution is formation of salt co-operatives,
which should be given free equipment and other facilities for salt ionization.
As Gujarat is the main producer of Salt, the Government of Gujarat has exempted the Salt
industry form VAT that will be implemented from 1st of May.
The Center’s recent decision to impose anti-dumping duties on soda ash imports from China has
been hailed widely by the salt industry. It is felt that the results of this measure will soon be
visible in the healthier balance sheets of both the salt manufacturers and the soda ash and caustic
soda industries.
20
ECONOMICAL FACTOR
The U.S. is the world's largest salt producer as well as the largest consumer. The U.S. salt industry
earns more than $1 billion a year. The second-largest producer is China, then Germany, Canada,
and India.
Only 17 per cent of the iodized salt produced in India is of the refined category, which means that
the remaining 83 per cent salt is being produced by medium and small manufacturers.
Under normal conditions, of the average salt production (13.5 to 14 million tones), around 4.5 to 5
million tones is consumed for edible purposes while, 5 to 5.5 million is utilized for industrial
purposes. Industrial salt is also used extensively in the chemical industry for the manufacture of
plastics, glass, chlorine, soap, textiles, paints, rubber, paper and caustic soda for aluminum
production.
The annual increase in overall demand for the commodity is pegged at a healthy 10 per cent and
by 2005; the total demand for salt is expected to increase by 40 to 50 per cent.
Branded salt accounts for 20 per cent of a five million-tone market, say some industry analysts.
Valued at Rs 500 crore, the market is growing at 20 per cent per annum. Tata Salt leads the
market with around 30 per cent market share followed by Hindustan Lever's Annapurna and
DCW's Captain Cook at around 15 per cent.
Nirma Shudh salt, Surya salt, Saffola salt, Nature Fresh salt, Nutra salt and unorganized salt firm
are the major threats to the market leader.
SOCIOCULTURAL FACTORS
Iodine deficiency is the single most important cause of preventable brain damage and mental
retardation, most of the damage occurring before birth. It also significantly raises the risk of
stillbirth and miscarriage for pregnant women. The successful global campaign to iodize all edible
salt is reducing the risk associated with this deficiency, which threatened 1.6 billion people as
recently as 1992. Nevertheless, it is estimated that 43 million people worldwide are suffering from
varying degrees of brain damage; there are an estimated 11 million overt cretins. Some 760
million people have goiters.
The Tata Chemicals has also some social responsibility and brand commitment and to this end has
launched the Desh Ko Arpan programme where 10 paise on each pack of Tata Salt sold in a
month would go to CRY.
The salt is being consumed by richest to the rich and poorest to the poor, so the Government
maintains the affordability of the price.
21
Nirma Shudh Salt is providing the edible salt with best quality at lower cost to provide customer a
value for their money.
Dabur and Saffola have launched low sodium salt for the health conscious people, which is for the
better living of the people.
TECHNOLOGICAL FACTORS
National Research Development Corporation, Government of India Enterprise, is a premier
technology transfer Corporation with four decades of experience. It has helped establish over one
thousand projects in the small and medium scale sector and which will help the different
companies to set up their own plants.
Basically, Refined Iodized free Flowing Salt Plants are mainly of five types:
Vacuum Refinery.
Mechanical Refinery.
Solar evaporation of sea water
Sub-soil
Lake brine
Companies are using the latest technology day by day to increase the production of the salt. Nirma Shudh
Salt is using about 7 machines, which will produce about 10 packets in a second. That will help the
company to produce more and more.
22
FIVE-FORCES ANALYSIS OF INDUSTRY
According to this model the competition in an industry goes well beyond the established players.
Through this five-force model the different companies are able to source the different competitive
pressure that highlights the critical strengths and weakness of the company, which will help the company
to know its position in the market, and able to highlight the areas where industry trends promise to hold
the greatest significance as either opportunity or threats. Here the primary focus will be on the strategy of
the individual industry. Following are some aspect, which are cover for the purpose of five-force model
of the salt industry.
1) THREAT OF ENTRY
No license fees:
The cost of entry is negligible. If the person has the capital and salt field from where he can
produce the salt in a large quantity, the person can start the business. However according to the
role of Government, every company in this industry has to produce the edible salt according the
standard set by them with respect to the iodization.
Minimum set up cost:
The company required not much of the initial cost as the raw material and the labour forces are
easily available. The company has just the cost of establishing the plant.
Price war:
There are big players existing in the market like Tata, HLL, Nirma, Dabur, and Marico etc., which
has the stiff competition for the price. The local players are also the major threats to the
competitive market.
Scope for expansion:
As the companies existing in the edible salt market has the over capacity of the production and
they are producing more than consumption of India, the new entrants will face a major problem
for the purpose of remaining in the market. Thus those companies that have the huge profit from
other sources will think about entering into this market.
23
2) THREAT OF SUBSTITUTE:
The salt is consumed by the richest to rich and poorest to the poor and salt is the commodity, which is
required the most. For the purpose of health consciousness, salt is the best way to maintain the level of
iodine in the body. There is no substitute available for the salt and still there is no research is on for the
finding of the substitute. The salt is available in a huge quantity whenever and wherever required. Thus
there is no problem of availability of the salt at any point of time that will make the producers not to think
about the salt substitute. Thus as there is no threat of the substitute; the industry rivals will be able to
concentrate on other things rather than giving time on thinking about the salt substitute. However there
are companies who are thinking about introducing the edible salt in a tablet form. Thus there is a
substitute for the packaging but not for the commodity itself.
3) BARGAINING POWER OF BUYER
Because of the availability of different brands of edible salt, a very small income and low consumer
involvement require for the purchase of edible salt results in a very little cost for buyers on to other
players.
• Low switching cost.
• Industry comprises of big as well as many local players.
• Customers are low price sensitive.
4) BARGAINING POWER OF SUPPLIER
The suppliers of the salt industry cannot able to increase the price of commodity because of the huge
stock available in the market that means the importance of the commodity is not vary much high to the
customers and it is the low involvement product which is not required much of the interest of the
customers to buy the product. Thus, whichever company will try to increase the price of the commodity
will loose the market drastically and not been able to achieve the growth as expected by the company.
Thus the bargain power of the supplier is not very influencing as compare to the bargaining power of the
buyer. The only advantage to the suppliers is the non-availability of the substitute product, which makes
the customers to remain with the same commodity.
5) COMPETITIVE RIVELRY
Tata Salt (Tata Chemicals) is the market leader with sales of 0.29m-ton pa. Annapurna (HLL) and
Captain Cook (DCW Home Products) are the two other major brands, which sell about 0.2mn and 0.3mn
ton pa each. While Captain Cook is positioned on the USP of free flowing nature of its salt, Tata Salt is
24
positioned on purity platform and Annapurna is positioned on the health benefit impact of the iodine
content in the salt. Nirma and Dabur are the two latest entrants in the branded salt market. Tata Salt, the
first branded salt in the country, was launched in 1983. Tata salt is manufactured by Tata Chemicals as a
by-product of its water distillation plant. DCW launched salt in 1991. It has three plants in Maharashtra,
Gujarat and Tamil Nadu. In August’ 98, Corn Products Company (India) Ltd (manufacturer of Knorr
brand of soups) acquired the Captain Cook brand and the salt manufacturing facility at Gandhidham for a
consideration of Rs900mn. Corn Products, renamed as International Best foods Limited wef October ‘98,
will now be one of the leading players in the segment. Hindustan Lever’s Annapurna was launched in
1996. HLL operates three plants at Maharashtra, Delhi & Bangalore. Nirma is setting up a soda ash plant,
which will produce 280,000 TPA of salt as by product. The company is currently test marketing Nirma
Free Flow Salt. Nirma has the advantage of a well-established distribution network of grocery stores
(where its soap and detergent brands are typically sold). With its strategy of competitive pricing, the
company has the potential to become a significant player in the segment Dabur has recently launched
Nutra salt, a low sodium salt. Marico has also launched Saffola salt which is a mineral enriched low
sodium salt. Both the above brands are positioned on the health platform, and are priced at a significant
premium to normal salt brands. Besides there are a large number of other local/regional brands in refined
and iodized salt.
25
COMPETITIVE ANALYSIS
The company, who wants to be the market leader in the edible salt segment, must know their competitor
from the bottom. Here we have tried to explore as many competitors as possible, which will help the
Nirma to know about their competitor. While talking about the different competitors of Nirma Shudh
Salt, let see where the company stands in the market first.
NIRMA INDUSTRIES LTD. (NIRMA SHUDH SALT)
Nirma is an over Rs. 17 billion brand with a leadership presence in Detergents, Soaps and Personal Care
Products, offering employment to over 15,000 people. Mr. K. K. Patel introduced the Brand in 1969.
Making phosphate free synthetic detergent powder by hand and selling it at Rs. 3/- per kg., when the
lowest priced detergent brand was Rs. 13/-. This value-for-money plank revolutionized the industry and
made fabric wash detergents available to the masses. Today, Nirma sells over 800,000 tones of it's
detergent products annually, giving it a 35% share of the Indian Market, which is the world's second
largest fabric wash products market. This makes Nirma India's largest detergent marketer and one of the
world's biggest detergent brands. Even though Nirma was a late entrant in 1990 in the highly competitive
toilet shop market, it is already the second largest manufacturer, selling close to 1,06,000 MT of bathing
soaps in 1999-00. The brand has over the years introduced products in toiletries and personal care with
soaps, shampoos and toothpaste, thus offering the consumer a complete product portfolio. Carrying on
Nirma's mission of providing 'Better Products, Better Value, Better Living' to its over 300 million
consumers through an efficient distribution network.
Following are the main competitors of Nirma Shudh Salt in the Edible Salt industry. The company can
only be successful if they know about their competitor very well.
TATA CHEMICALS LTD. (TATA SALT)
Launched in August 1983, Tata Salt was the first national brand of packaged salt to be marketed in India.
To millions of Indian housewives, it presented a welcome move away from the loose, unbranded salt of
suspect quality to the reassurance of clean, pure salt — guaranteed by India’s most trusted business
house. Tata Salt leads the way as first mover and leader in the branded iodized salt market. It has a 17-
per-cent market share in the branded salt category and among national brands; its share is higher at 38 per
cent. The marketing strategy would be to continue expanding reach and availability of the product while
improving the market base. It will continue upgrading users of unbranded, unhygienic loose salt and
continue to improve product and packaging offering to the consumer. The company has also some social
26
responsibility and brand commitment and to this end has launched the Desh Ko Arpan programme where
10 paise on each pack of Tata Salt sold in a month would go to CRY. An average of three crore Tata Salt
packs are sold each month. Advertising for the product largely revolved around the television medium
with Doordarshan forming the dominant chunk of its media plan given it still has the highest reach
especially in areas like UP, MP and Bihar where vast numbers of consumers are unbranded and loose salt
users. This year will see TCL spend about Rs 10 crore on advertising between the Tata Salt and
Samunder brands. Though the market is competitive with multinationals and Indian firms alike pumping
money into messaging the consumer, Tata Salt will continue to lead as long as it reaches out and makes
itself available. The company always has an ear to the ground to be in touch with the consumer's needs.
The company is also exporting their salt to the Middle East and Bangladesh.
MARICO INDUSTRIES LTD. (SAFFOLA SALT)
Marico Industries with an extension of the Saffola brand equity, a 30-year old kardi oil brand associated
with "the heart of a healthy family", to salt which forms part of a larger purpose: to develop Saffola into a
strong umbrella brand riding on its age-old USP of "good for the heart". There was a need in the
marketplace for such a product, which cannot be directly, compared to other branded salts because of the
price premium those Saffola salt commands. Saffola salt is priced at Rs. 25 for a one kg jar (this is the
first time that the most common food ingredient salt is being introduced in a jar form. The price premium
is partly due to this additional cost). The company has launched the salt in select towns like Mumbai,
Delhi, Chandigarh, Calcutta and Pune at a special price of Rs. 20. The pricing may, a complete value to
the consumer who gets a re-usable jar along with the salt. The company may later look at introducing
other sizes and try to cut down on the cost, which would eventually bring down the price to the consumer.
However, this price would still be at a slight premium over other branded salts in the market due to its
unique qualities, put off a consumer who’s used to paying Rs. 6 to Rs. 7 for a kg of common salt. Salt for
Saffola, well known among those health conscious consumers? The thinking behind extending the brand
to the common salt was simple: "Because salt is the main intake most consumers suffering from
hypertension, a common heart ailment, are asked to cut down on. They have tested the salt with doctors
and have been introspecting on the concept for over a year now. It involves, in addition to iodizing the
salt, a reduction of around 25 per cent of sodium, which has been substituted by an equivalent amount of
potassium. Further, they have also not compromised on the taste element. The company has not yet
launched any conventional modes of promotions like advertising. The company feels that the Saffola-
conscious consumer is the company's primary target and that would mean four lakh households. As far as
penetration is concerned, Saffola salt, like the oil, will be an urban phenomenon. Although Saffola salt
27
has been launched without much fanfare, the repeat purchases since its launch a few days back are
commendable.
HINDUSTAN LEVER (INDIA) LTD. (ANNAPURNA SALT)
Hindustan Lever’s Annapurna was launched in 1996. HLL operates three plants at Maharashtra, Delhi &
Bangalore. The company has achieved almost 30% market share across the country but not able to do too
much of the business in western segment. The company has more market share towards the northern part
of the country. The company has the advantage of best and most successful distribution network for their
different product line, which has help, the company to provide the edible salt whenever and wherever
required. The company has also launched its consumer schemes of two sachet of Clinic all Clear free
with the 1 Kg pack of Annapurna salt. The company is also focusing on the southern region of the
country where the local players has the more market share. The company has acquired the Captain Cook
brand from the Corn Products Company. The only brand where there is an overlap is Captain Cook in the
staple food categories of salt and atta. With both Captain Cook as well as Kissan Annapurna currently
being sold on an almost similar price platform, a re-look at the positioning of the Captain Cook brand is
inevitable. Also problems faced post acquisition and inadequate marketing support has somewhat
tarnished the equity of this once extremely popular brand. But given that the brand even today enjoys a
strong recall, it is unlikely that Captain Cook will die a silent death. A more likely possibility is that HLL
will use Captain Cook as a flanking brand, positioning it in a different consumer price segment, as has
been HLL’s strategy in most product categories. Besides the brand provides HLL an excellent
opportunity to strengthen its position against Godrej Pillsbury and Tata Salt the two most potent
competitors in the atta and salt markets.
KUNVAR AJAY INDUSTRIES (DANDI SALT)
Unleashing a multi-brand strategy, the company has decided to launch its first product, salt, under the
Dandi brand, with more products to follow under different brand names. With no synergies between the
two lines of business, the 20-year old saree player has decided to get adventurous and venture into the
guarded territories of biggies such as Hindustan Lever and the Tatas. Pricing their brand of Dandi on par
with the existing brands of Annapurna and Tata salt, the Rs 7 per one kilo bags are being made available
at a national level. Relying purely on internal funds, the company, which heavily advertised its saree
brand on a budget of nearly Rs 25 crore, has marked a healthy budget of Rs 10 crore for its new salt
brand. Using the USP of being a pure product, it is the triple-refined process in manufacturing which is
expected to hold the product in good stead (considering most branded salts are double-refined). The
company has positioned itself as the Amrit hai buddhi aur Shakti ke liye (good for the health and mind)
that may make a difference in this competitive industry. Realizing that distribution will be the key to
28
getting its products accepted, the company has already covered 414 towns reaching out to half-a-million
retailers within the 14 weeks since launch. It aims to reach out its salt to two lakh retailers by March.
Besides, it has also decided to sell its salt on an advance demand draft system, breaking away from the
long credit-based system adopted for its saree business.
CARGILL (INDIA) PRIVATE LTD. (NATURE FRESH):
Nature Fresh, Cargill India's staples brand, is forcing big names in the highly fragmented and competitive
market to take note of it. Catalyst presents insights into Operation Cargill. If Nature Fresh is making big
names in the industry sit up and takes note, it is because Cargill India is not exactly just a new kid on the
block. Cargill India Pvt. Ltd., the 100 per cent subsidiary of the Minneapolis-based, $49 billion agri foods
major, has varied interests. And given its historical strengths in agri-economy and logistics management,
Cargill India is advantageously positioned to service its supply chain. And according to ORG-MARG's
retail store audit data, the size of the iodized branded salt market is estimated at 15 lakh tones per annum
(which works out to about Rs 500 crore by value). National brands comprise only 45 per cent share of
this market. Among other reasons, one reason why salt is bigger than other branded commodities is the
Government's iodization drive. According to Cargill officials, the new advertising will be significantly
different from the earlier communication. While ad and promotional budgets are not available, the
company says it is doing the needful to take the battle of the brand head on.
UNBRANDED\LOCAL PLAYERS
The major threat to any company in the edible salt segment is with the local unbranded players. There is a
huge market for the loose salt because of its cheapest price. This unorganized sector has covered about
85% market of the edible salt market. If any company will overcome this problem then there is a huge
market for the edible salt. There are many local players existing in Gujarat, namely, Taja, Tara, Haathi,
Sagar, Ambica, Shagun, Umiya etc. they are major threat to the edible salt industry, which must be
overcome.
29
PROMOTIONAL CAMPAIGN IN EDIBLE SALT INDUSTRY
Tata company manufactured Tata Salt, India’s first iodized salt. The first competitive challenge came in
the early 1990s with the launch of Captain Cook. Positioned as a free–flowing salt, it helped create
awareness about brands in the salt segment. Tata Chemicals responded by releasing ads to counter
Captain Cook’s claims. As more consumers moved from non-branded or local products to the national
brands, Tata Salt’s inherent superiority and strong distribution network ensured its continuing growth in
terms of market share and category expansion. In 1996, Annapurna, another national salt brand, was
launched. It was positioned on the health benefits of iodine. Iodization had become almost a hygiene
factor and consumers did not perceive it as a differentiator. The rising number of players in the branded-
salt segment got Tata Chemicals to think of strategies to combat the possibility of its market share being
eroded. In 1998, the company conducted a comprehensive market research study to understand the
consumer psyche. The results ranked Tata Salt high on attributes such as iodization, free flow, purity and
whiteness (consumers thought of Tata Salt as a ‘saltier salt’).
Acquired from DCW Home Products Ltd for an estimated price of Rs 85 crore, the brand is back on retail
shelves after a hiatus of nine months. Captain Cook is available at an introductory price of Rs 6 per one
kg pouch, which is a 25 per cent discount to brands like Kissan Annapurna from Hindustan Lever and
Tata Chemicals' Tata salt. Although the company was not available for comment, an International Best
food has not made any major changes in the product packaging. Even the ad campaign, is a re-run of the
mid-nineties campaign.
During the past one year, the complexion of the Rs 100 crore branded salt market has changed
considerably. There is a new entrance in the market -- Marico Industries Limited -, which launched two
variants of branded salt under the Saffola umbrella. The existing players, Tata Salt and HLL's Kissan
Annapurna salt have been aggressively pitching for market shares. Tata Salt and Annapurna have gained
market share at the expense of Captain Cook, which has lost around four per cent market share to 11 per
cent due to erratic supply over the past one year. Tata Salt leads the market with an estimated share of 33
per cent. The second in the rung is Annapurna, with close to 16 per cent share.
Owing to increased competition in the marketplace, the `free flow' proposition that had established the
Captain Cook brand in the early 1990’s is quite basic to the category by now. Marketers have started
`adding value' and hard selling ingredients in the branded commodities market.
While Tata salt changed its positioning to `vacuum evaporated ' from `iodized salt' a few months ago, the
product ingredient `iodine K15' is the focal point of communication for Annapurna salt. Marico Industries
30
is also not offering anything basic with its `potassium enriched salt' that hinges on the strong `heart care'
equity of Saffola. Analysts say that Captain Cook has challenging times ahead in a competitive
environment. With branded salt contributing close to 20 per cent of a five million-tone market, this
category has huge potential going by the 20 per cent growth per annum.
AFTER colas and toothpaste, the stage is set for another potential ad war on the fast moving consumer
goods front. This time around, it is the good old salt, which is turning out to become the bone of
contention between two major players. Tata Chemicals, which markets Tata Salt, has taken umbrage to
the electronic campaign for Hindustan Lever's Annapurna salt. Tata Chemicals has approached the
Advertising Standards Council of India (ASCI) against the currently on air advertising for Annapurna
salt, which ends with a child bidding goodbye (or `Tata') to all other salts available in the market.
According to ORG-MARG estimates, the domestic branded salt market, by volume, is estimated at 15
lakh tones. Tata Salt leads in the branded salt market with a market share of 18 per cent, according to a
recent ORG-MARG retail audit. HLL's Annapurna, which has been very aggressive in marketing-related
activities in the recent months, has a market share of 16 per cent.
Another recent entrant to the branded salt category is Dandi salt. While this brand is being advertised
heavily on regional channels, it has managed to gain only a 1.5 per cent share of the branded salt market,
according to ORG-MARG estimates.
Apart from Tata Salt and HLL's Annapurna, the market share of other players is by and large fragmented,
according to industry analysts. The unbranded sector continues to control a sizeable share of the overall
salt market in the country.
31
NIRMA INDUSTRY
INTRODUCTION
Nirma is the Rs.17 billion Detergents, Soaps and Personal Care Products Brand, a
market leader in the Indian detergent market and second largest in bathing soaps... the brand NIRMA being one of the world's
biggest in it's segment... a result of it's mission to provide
'BETTER PRODUCTS, BETTER VALUE, BETTER LIVING'.
Shri Karshanbhai Patel's vision introduced a new philosophy or approach, which held that better quality,
can be offered even at lower prices. NIRMA in late seventies introduced the concept of TOTAL
QUALITY MANAGEMENT (TQM) in Indian detergent market. It not only followed kaizen & kanban
the famous management philosophies. But more importantly it followed them successfully.
At NIRMA, they first identify the market, establish themselves there & then try for a market unlike others
who first advertise & then try for a market share. His philosophy has always been: " first test the market
& then advertise, Go to the public with a good product, establish it in the market & then go for publicity."
The cornerstone of Nirma business philosophy is captured pithily in their new slogan, "Better products,
Better Value, Better Living."
Karshanbhai's business policy may be stated thus: " Good quality at a affordable price makes selling
automatic."
Karshanbhai's NIRMA was catapulted by " A smart pricing strategy for a particular quality to a
developing mass market."
32
Shri Karshanbhai Patel attributes his entrepreneurial success to:
Enjoying work more than the monetary gains.
Enjoying smile on the faces of a satisfied NIRMA customer.
Ability of taking right decision at the right time.
Vision, Mision & Philosophy
Nirma is a customer-focused company committed to consistently offer better uality products and services
that maximise value to the customer.
This customer-centric philosophy has been well emphasised at Nirma through:
� Continuously exploring & developing new products & processes.
� Laying emphasis on cost effectiveness.
� Maintaining effective Quality Management System.
� Complying with safety, environment and social obligations.
� Imparting training to all involved on a continuous basis.
� Teamwork and active participation all around.
� Demonstrating belongingness and exemplary behavior towards organisation, its goals and objectives.
Nirma is a phenomenon and synonymous with Value for Money. The brand transcends the specific
dynamic of any particular product category, which is best captured in its above mission statement – a
statement of sustained innovation, an unceasing effort to deliver better value to consumers, through better
product quality.
Shri Karshanbhai, from a chemist with Gujarat Government's department of mining & Geology became
the owner of the market leader in detergent business. His business vision & ability to understand what
consumer need & wants, allowed him to transform his backyard business into a reputed market leading
company. India is a famous for the leader like Dhirubhai Ambani, J.R.D. Tata, Azeem Premji, and
Narayan Murti. Among the corporate leaders of Gujarat, Shri Karshanbhai Patel's name stands apart.
Shri Karshanbhai's success is the inspiring story of a self-made man who inherited neither a family
business nor a business background. Coming from a family of farmers he has risen to be among the most
powerful impact generating entrepreneurs of our country.
Shri Karshanbhai Patel, a down to earth man started a moon-lighting activity choosing to manufacture a
down-to-earth product for the ordinary, average, not-too-rich, not-too-sophisticated consumer & met sky
rocketing success leveling multinational like Hindustan Lever in lower and humbler clouds.
33
Karshanbhai was born in 1944 in Ruppapur, a small village in Gujarat. Karshanbhai's went to school
there & later at the age of nineteen, qualified as a chemist with a B.Sc. Degree. For the next six years, he
worked as a laboratory technician first at the cotton mills & later in the Gujarat Government's Department
of Mining & Geology.
In his free time in the evenings, with the limited know-how he has acquired at work, he started
experimenting in the background of his house to produce liquid detergent. The idea, however, has to be
promptly abandoned, as liquid detergent was difficult to make & would certainly be difficult to market,
for it was too new a concept for the consumer.
Then he tried his hand at making detergent powder & succeeded. The production started in 1969, with
initial investment of Rs. 1000/- borrowed from friends & relatives. Karshanbhai set up a company
"NIRMA Chemical works" named after his one -year -old daughter Nirma (Nirupama). The process of
manufacturing the detergent powder was manual & required no sophisticated machinery or technology.
For the next three years, Karshanbhai managed a one-man show in the time he had at his disposal after
his office hours. At that time, he followed one man - door-to-door marketing. Slowly and gradually,
price-conscious housewives became eager buyer of this homemade and low-priced (Rs. 3/kg) product.
Karshanbhai was selling on a satisfaction or refund basis. Thus a whole new market of middle-class
consumer was created. Initially, the powder was sold to some friends and relatives, then to us many
customers as Karshanbhai could pedal to, a new salesman were hired on commission basis for selling
door-to-door.
A salaried chemist by day and manufacture, distributor and service manager by evening, Karshanbhai
became a well-known figure though his personalized attention to his customers. The demand for his
product increased, the profits improved and the future crystallized. He gave up his Government job and
expanded his moonlighting ventures into a fall-time manufacturing operation in 1972.
At this stage, he found small 12-sq. yard industrial shed in Khokhara Mehmedabad near Ahmedabad and
shifted his production there. Within three years, Nirma had established a market in Gujarat and
Maharastra. Then came on the plastic bag of the detergent powder, now nation wide picture of his
dancing in a sparkling white frock. In 1977, Karshanbhai started advertising on the radio! Slides were
made for advertising on the cinema screen also. These were followed by the resounding television
advertisements. All this publicity paid of in rich measure. Within five years, Nirma was visible on the
national scene. Nirma had distributed the well-settled Hindustan Lever and notched up 60% of the
34
powder market share in the western region and dislodged Hindustan Lever from the first position. An
almost primitive manufacturing process and some ingenious marketing was giving the professionally-
managed company's product a run for its money. Karshanbhai's company has always used a well-planned
business strategy and marketing policy to hold its price line. Increase in the costs of raw material and
labor has been offset by increase in production. Nirma have used the concept of value engineering. They
avoided the use of those ingredients, which did not give functional value for the money. Karshanbhai's
looks at his cost versus what people are willing to pay. Today, round about 5,00,000 retailers’ watch
Nirma packets disappear from their shelves. Nirma is the impressive success story of the simple.
Unassuming man is manufacturing a down-market product by using appropriate technology. Which is
neither very modern nor sophisticated. It is the story of a company that rose from a 12-sq. yard covering
factories at Vatva, Chhatral and Mehsana in Gujarat. From making a small lot of a powder once a week in
1969, Karshanbhai moved up to 500 kg. A month in 1972 and today is selling 1,200 tunes of powder 700
tunes of detergent cakes per day. Over 200 trucks line up near he gates of Nirma plants, to pick up the
product to satisfy the large and growing demand steadily at he rate of 50% for the last 14 years. In no
country anywhere in the world does one company sell much detergent less than one brand name.
35
PRODUCT LIST
DETERGENT POWDERS:
• Nirma washing powder
• Super nirma detergent powder
• Nirma popular detergent powder
• Green nirma washing powder
• Nima detergent powder
DETERGENT CAKES:
• Nirma popular detergent cake
• Nirma detergent cake
• Super nirma detergent cake
• Nima green detergent cake
• Nima blue detergent cake
• Nimabartan bar
• Nirma clean
BATHING SOAPS:
Nirma beauty soap
Nirma bath soap (carbolic)
Nirma premium soap
Nirma lime fresh soap
Nima rose
Nima lime
Nima winner
Nima sandal
Nirma rose
Nima herbal
Nirma herblina
OTHER PRODUCTS:
• Nirma beauty shampoo
• Nirma shikakai
• Nirma toothpaste
• Nirma shudh iodized free flow salt
36
INDUSTRIAL PRODUCTS:
• Sulphuric acid
• Linear alkyl benzene
• Glycerin
• Fatty acids
• Soda ash
MANUFACTUIRNG PLANTS:
• Mehsana Gujarat
• Ahmedabad Gujarat
• Bhavnagar Gujarat
• Rajkot Gujarat
• Dhar Madhya Pradesh
• Kanpur Uttar Pradesh
37
NIRMA SHUDH SALT
The edible salt industry in India is unique in away that it is only 10% branded the rest constitute of
unbranded loose salt. The per capita consumption is 6 kg though the point to ponder is the rate at which
unbranded market will convert to the branded. Nirma has decided to become the driver of this growth.
The salt market provides attractive avenues for Nirma, as there are huge volumes and low branded salt
penetration. Nirma salt has one of the best qualities in terms iodine content of 30 ppm, free flow property,
whiteness and saltiness. It is refined through a process, which retains natural mineral content in balanced
quantity. The moisture proof pack keeps Nirma Iodized Salt non sticky and fresh. The salt is available in
1 kg pack size.
MARKETING STRATEGY
"Marketing strategy is nothing but a combination of decisions bearing of the various aspects of marketing
mix". These are product, pricing, delivery, distribution, packaging and promotion. NIRMA concentrate
more on all aspect that's why NIRMA has very good market in not only Gujarat but also in other state of
the India.
1. For product planning:
NIRMA take decision for new product whether product or not?
Then they research the product by research department.
Research departments are divided as under:
2. MIS:
In this step they collect details about competitors product.
They saw the pricing of product features, advertisement, packing fragrance promotion of
product etc.
3. After this two-step they do the production of a particular product.
38
MARKET SEGMENTATION
We know that market segmentation means dividing a market into district groups of buyers with different
needs, characteristic or behavior. We might require separate products or marketing mixes? It refers to
large heterogeneous market into smaller homogeneous parts in order to select any one out them in which
the company thinks it
satisfy customer more effectively different products for different segmentation. Male/female
segmentation & fragmentation are also part of market segmentation. For larger, the target is fulfilling by
the help of advertisement & promotional base. There are different classes of people purchasing the
product of NIRMA, like…
Lower middle class family
Middle class family
Upper middle class family
Higher-class family
PRICING POLICIES
Price refers to the value of product attributes. Expressed in monetary terms with a customer pay or is
accepted or afford utility. Value is referring to the quantitative aspect product relative to other product.
In NIRMA, Pricing Policies of work like as under:
MIS
First MIS show the price of competitors.
Parallel Pricing Policy:
1. Bunch marketing
2. Profit margin
They give 5% to retailers, 1% to distributors & the company will get the
remaining profit.
Nirma’s main objective is service rather than profit. No doubt there is profit but pricing is just to meet
minimum margin. Thus it has bee observed that their pricing policy is very effective in the rural market.
39
Company wants to maximize its profit then unit established higher policy. The company wants to cover
the larger part of the market and for that the company may establish negligible profit policies for its
different products.
CHANNEL OF DISTRIBUTION
The channel of distribution will play an important role for the company that are operating their business
in the edible salt market because people will buy only that product which will be available at the purchase
outlet. The level of brand switching is high here. Thus channel of distribution will play an important role
for effective reach to the end consumer.
FACTORY
AGENTS
DEPOTS
RETAILERS
WHOLESELLER
CONSUMERS
The other channel of distribution is as follows:
COMPANY
STOCKPOINT
DISTRIBUTORS
RETAILERS\WHOLESALER
CONSUMER
40
SALES PROMOTION
We know that sales promotion means short-term incentives to encourage purchase or sales of a products
or services. The company, Nirma is also providing sales promotions to promote their brands like:
CONSUMER PROMOTIONS
TRADE PROMOTIONS
SALES FORCE PROMOTION
PROMOTIONAL EXPENCES
NIRMA does promotional expenses as under:
TOTAL PROMOTIONAL EXPENSE
(3% OF SALES)
ADVERTISING SALES PROMOTION
(2% OF SALES) (1% OF SALES)
PRESS TELEVISION CINEMA RADIO OUTDOOR
25% 35% 20% 15% 5%
Among all tools of promotion, advertising is given prime importance by the company. That can be seen
from the above chart. More stress is put on Television. Press Media is also given importance.
41
SWOT ANALYSIS
OF
NIRMA SHUDH SALT
A scan of the internal and external environment is an important part of the strategic planning process. The
SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to
the competitive environment in which it operates. As such, it is instrumental in strategy formulation and
selection.
The company Nirma has following strength and weakness, which will help the company to decide about
the future planning for their success in their edible salt business.
STRENGTHS
• Strong Brand equity. Nirma is an Rs.17 billion-umbrella brand offering consumers a broad
portfolio of products at multiple price points in the Detergents, Soaps, Salt and Personal Care
market.
• Produces a range of industrial chemical products which primarily serve as raw material or
intermediates for Soaps & Detergents business.
• Wide distribution network.
• Good advantage in the rural market because of its price.
WEAKNESS
• High interest burden.
• Less presence in premium segment.
• Lacking in the export market.
42
OPPORTUNITIES
• Exports
• Acquisitions for strengthening its distribution tie-ups.
• Entry into the South Indian market where there is a huge market for edible salt, which is not,
captured by any national player and occupied by the unorganized sector.
• Entry into the tablet salt market.
• Government rule of selling only iodized salt, which will generate a huge market.
THREATS
• Emergence of regional but strong players.
• Entry of many big players like Adani, Marico, Kunvar Ajay etc. is a big disadvantage.
• Poor quality image of a company about the product in the urban areas.
43
44
(1) Do you use Iodised Salt or Uniodisd Salt?
(_) Iodised (_) Uniodised
Now a day’s most of the people are aware about the benefits of the Iodised Salt because iodine is a
necessary requirement of a body and it will also helpful in curing some diseases like Thyroid, Goiter.
Thus the awareness regarding the iodized salt is necessary. Following are some numbers which will
shows the awareness regarding the iodized salt in a particular area.
Interpretation:
From the graph we can conclude that there are 92% of the respondents are aware about the
Iodised salt and they are using Iodised Salt and still 8% of the respondents don’t know about the Iodised
Salt.so there is more chance of occurring iodine deficiency disease to them.
No.of
respondents
Iodised Salt 229
Uniodised Salt 21
45
(2) Which brand of Iodised salt do you use?
___________________________________________________
Interpretation:
On the basis of this question preference for using Nirma Shudh Salt with other is easily found
out by Respondents, so one can have rough idea about the market standing of the Nirma Shudh Salt with
Other brand.
Here TATA Salt is leading with 33% of the market of the Iodised Salt and it is followed by the Nirma
Shudh Salt as 22% of the market of the Iodised salt. Annapurna and Dandi having shares of 13% and
TATA 76
NIRMA 49
ANNAPURNA 34
DANDI 30
SAFFOLA 12
CAPTAIN COOK 12
LOCAL 16
46
15% respectively. In my sample size there are 7% of the respondents who are using local brands like
Ambika and Taja salt.
So I conclude that awareness regarding Nirma Shudh Salt is up to the mark as 22% of the market share of
Iodised salt is acquired by the Nirma Shudh Salt.
Nirma Shudh is not able to grasp good market though it has a good distribution network. Actually there is
a need for the company to convenience people through advertisement to purchase their brand at a lower
cost and best quality.
TATA NIRMA DANDI ANNAPURNA CAPTAIN
COOK
OTHERS
MANINAGAR 14 9 4 6 3 0
RANIP 18 10 6 4 2 0
SATELLITE 17 7 3 5 2 0
SARASPUR 10 9 4 8 2 4
MEGHANINAGAR 11 7 8 5 3 3
NARODA 6 8 5 6 0 9
From this graph it is easily concluded that users of the Nirma Shudh salt are ranging from 17% to
23% which is equal to the overall users of Nirma Shudh salt for Ahmedabad area.
47
(3) On what basis do you select the salt brand?(Rank from 1 to 5 where 1 is best )
(_) Price
(_) Free flow
(_) Whiteness
(_) Brand Name
(_) taste
Interpretation:
It is very important for any company that on what criteria or basis their product is purchased by
the consumers. Here there are main five criteria on the basis of which consumers are using the salt. Here
Respondents are asked to give Rank between 1 to 5(where 1 is best). After calculating the ranking
preference Taste stood at first position with 47.15%, Price stood at second with 31.44%, Free flow stood
at third position with 42.35%, Brand Name stood fourth with 31.44% and last whiteness of the salt with
49.33% of all the criteria.
48
AVERAGE
MEAN
PRICE 2.86
FREE FLOW 3.00
WHITENESS 3.84
BRAND NAME 3.37
TASTE 1.85
Here it is easily concluded from the above graph that taste is mostly preferred followed by price,
free flow, brand name and whiteness for the selection of the salt brand by the consumers.
49
(4) Do you use same brand of the salt everytime?
(_) Yes (_) No
Yes 157
No 72
Interpretation:
With the help of this question brand loyalty of the respondents for the Iodised salt is found out.
Here there are 69% of the respondents are brand loyal to same salt brand where as 31% of the
respondents are not brand loyal.
50
(5) How often do you purchase salt?
(_) 15 days duration number of Packets: _______
(_) 1 month duration number of Packets: _______
(_) 1.5 months duration number of Packets: _______
(_) 2 months duration number of Packets: _______
No. of
Respondents
15 Days 53
1 Month 157
1.5 Month 19
2 Month 0
Interpretation:
Here from the graph and responses obtained there are 69% of the respondents purchase salts monthly
where as 23% of respondents purchase salt fortnightly.
51
No. of
Respondents
No. of
family
member
1 packet 13 2
2 packets 117 5
3 packets 22 6
4 packets 5 7
And out of the 157 respondents 75% are using 2 packets of the 1 kg salt.
52
Interpretation:
From this graph one can conclude that 1 packet (1kg) of salt is used by 2 family member for
one month, 2 packets of salt are used by 5 member of the family monthly, 3 packets of salt are used by 6
member monthly, 4 packets are used by 7 member of the family for 1 month so one can have idea about
family size, purchase pattern and no. of packet required for 1 month.
53
(6) Who decides of purchasing salt?
(_) Elders (_) Husband
(_) Wife (_) others ___________
ELDER 63
HUSBAND 41
WIFE 78
OTHERS 47
Interpretation:
Here from the graph it is concluded that 34% of the purchase decision are taken up by wife, 18% of
husband takes purchase decision, 27% of the purchase decision is taken by elders of the family and 21%
of the decision is taken by the others (housewife).
54
(7) From where you purchase salt?
(_) Super Market (_) Provision Store
(_) Convenience Shop (_) any other___________
super market 48
Convenience Shop 65
provision store 105
other 11
Interpretation:
46% of the respondents are purchasing salt from the provision store, 28% of the respondents are
purchasing salt from nearby shop, 21% of the respondents are purchasing salt from supermarket and 5 %
of the respondents are purchasing from different places like Mall, Departmental store etc.
55
(8) Have you ever used Nirma Shudh Salt?
(_) Yes (_) No.
Interpretation:
There are 62% of the total respondents who have used Nirma Shudh Salt one or more time but out
of that many respondents are not stick to one brand that’s why market share is lower than TATA.
56
(9) If yes, what do you like most about Nirma Shudh Salt?( Rank from 1 to 5 where 1 is best )
(_) Whiteness
(_) Free flow
(_) Price
(_) Double refined Salt
(_) taste
Interpretation:
From the graph it is concluded that for the use if Nirma Shudh Salt consumer prefer price at first
rank followed by taste, double refined salt, free flow and whiteness.
57
(11) How you find the price of Nirma Shudh salt?
(_) Very High (_) High (_) Average
(_) Low (_) Very low
If high, then what do you think the price should be for Nirma Shudh salt?
Price: ________Rs/Kg.
very high 0
High 0
Average 174
Low 55
very low 0
Interpretation:
76% of the Nirma Shudh Salt user saying that they find price of the salt as average price and 24%
of respondents find price low as compared to other salt brands.
58
(12) From where you influenced to purchase Nirma Shudh Salt?
(_) Advertisement (_) Friends (_) Relatives
(_) Retailers (_) Others ______
If Advertisement, then what was the media?
(_) Television (_) News paper (_) Radio
(_) Hoardings (_) Magazines
(_) Other __________
ADVERTISEMENT 115
FRIENDS 40
RETAILERS 48
RELATIVES 22
Interpretation:
Advertisement of the Nirma Shudh salt is the main influencer for the purchasing of Nirma
Shudh salt as 51% of the respondents are influenced by the advertisement in different media. It is
followed by friends, retailers and relatives as 21%,18% and 10% respectively.
59
MAGAZINES 74
NEWSPAPER 5
RADIO 0
HORDINGS 0
Television 68
Interpretation:
Those who are influenced by the advertisement are mostly influenced by two media one is TV AS
broadcasting media and Magazine as print media.
60
(13) Have you seen the Television Advertisement of the Nirma Shudh Salt?
(_) Yes (_) No
If Yes, How did you find it in terms of message?
(_) Very good (_) Good (_) Average
(_) Bad (_) Very bad
Interpretation:
Here there are 85% of the respondents said that they had seen the television advertisement.
NO. of
respondents
YES 195
NO 34
No. of
respondents
very good 6
Good 96
Average 62
Bad 31
very bad
61
Interpretation:
Out of those 85% respondents 49% had find advertisement good, 3%find it very good, 32% of them find
ad average and 16% of them find it bad so it is concluded that TV ad prepared is good at some extent.
62
(14) Do you find any difficulty in availability of Nirma Shudh Salt?
(_) Yes (_) No.
yes 10
No 219
Interpretation:
Here 96% of the respondents don’t find any difficulty in availability of Nirma Shudh salt whereas 4% of
them find difficulty in availability. So it is concluded that there is no shortage of the stock for Nirma
Shudh Salt.
63
(15) If Nirma Shudh Salt is not available in store, you will,
(_) Try another brand (_) Go to another shop
(_) Postpone Purchase
try another brand 167
go to another shop 14
postpone purchase 48
Interpretation:
Here if there is stock out situation for Nirma Shudh salt then 73% of respondents will try another brand of
salt, 6% will go to another shop and 21% will postpone their purchase so they are not stick to one brand.
64
(16) Do you like the packaging of Nirma Shudh Salt?
(_) Yes (_) No
Yes 118
No 110
Interpretation:
Here 48% of the respondents said that they don’t like packaging of the Nirma Shudh salt Where
as 52% of the respondents like the packaging.
So as respondents who don’t like packaging of salt is high so there will be requirement for
changing the packaging of the Nirma Shudh Salt.
65
Education level
Interpretation:
Most of the respondents who are purchasing Nirma Shudh Salt are 12th pass or graduate from different
area of the Ahmedabad city.
66
Income level
Interpretation:
Here in the different area of Ahmedabad the respondents who are purchasing salt are having income level
b/w 5000 to 10000.in some of the area below 5000 RS- income level are respondents who are purchasing
salt.
67
Profession :
Interpretation:
Most of the respondents are housewife and service people who are purchasing salt so company can target
them for their advertisement.
68
HYPOTHESIS CALCULATION
Ho: Preference towards salts and area are independent of each other.
H1: Preference towards salts and area are dependent of each other.
Where:
Fo= observed frequency
Fe= expected frequency for each cell
Fe=(frequency for the column)(frequency for the row)/n
69
Calculation
Observed Frequency
TATA NIRMA DANDI ANNAPURNA CAPT
C.
OTHERS total
MANINAGAR 14 9 4 6 3 0 36
RANIP 18 10 6 4 2 0 40
SATELLITE 17 7 3 5 2 0 34
SARASPUR 10 9 4 8 2 4 37
MEGHANINAGAR 11 7 8 5 3 3 37
NARODA 6 8 5 6 0 9 34
Total 76 50 30 34 12 16 218
Expected Frequency
TATA NIRMA DANDI ANNAPURNA CAPT C. OTHERS
MANINAGAR 12.55 8.25 4.9 5.61 1.98 2.64
RANIP 13.94 9.17 5.5 6.2 2.2 2.93
SATELLITE 11.85 7.7 4.67 5.32 1.87 2.49
SARASPUR 12.89 8.48 5.09 5.77 2.03 2.71
MEGHANINAGAR 12.94 8.48 5.09 5.77 2.03 2.71
NARODA 11.89 7.7 4.6 5.32 1.87 2.49
70
Fo Fe Fo-Fe (Fo-Fe)^2 [(Fo-Fe)^2]/Fe 14 12.55 1.45 2.1025 0.16753 18 13.94 4.06 16.4836 1.182468 17 11.85 5.15 26.5225 2.238186 10 12.89 -2.89 8.3521 0.647952 11 12.94 -1.94 3.7636 0.29085 6 11.89 -5.89 34.6921 2.917754 9 8.25 0.75 0.5625 0.068182
10 9.17 0.83 0.6889 0.075125 7 7.7 -0.7 0.49 0.063636 9 8.48 0.52 0.2704 0.031887 7 8.48 -1.48 2.1904 0.258302 8 7.7 0.3 0.09 0.011688 4 4.9 -0.9 0.81 0.165306 6 5.5 0.5 0.25 0.045455 3 4.67 -1.67 2.7889 0.597195 4 5.09 -1.09 1.1881 0.233418 8 5.09 2.91 8.4681 1.663674 5 4.6 0.4 0.16 0.034783 6 5.61 0.39 0.1521 0.027112 4 6.2 -2.2 4.84 0.780645 5 5.32 -0.32 0.1024 0.019248 8 5.77 2.23 4.9729 0.861854 5 5.77 -0.77 0.5929 0.102756 6 5.32 0.68 0.4624 0.086917 3 1.98 1.02 1.0404 0.525455 2 2.2 -0.2 0.04 0.018182 2 1.87 0.13 0.0169 0.009037 2 2.03 -0.03 0.0009 0.000443 3 2.03 0.97 0.9409 0.463498 0 1.87 -1.87 3.4969 1.87 0 2.64 -2.64 6.9696 2.64 0 2.93 -2.93 8.5849 2.93 0 2.49 -2.49 6.2001 2.49 4 2.71 1.29 1.6641 0.614059 3 2.71 0.29 0.0841 0.031033 9 2.49 6.51 42.3801 17.02012
χ2Cal=41.18375
71
χ2Cal = 41.18375
Degree of freedom=(R-1)*(C-1)
= (6-1)*(6-1)
=25
Confidence level = 95 %
Therefore χ2tab = 14.611
Now in this case χ2cal > χ2tab hence null hypothesis is rejected and alternative hypothesis is accepted.
Conclusion: Preference towards salts and area are dependent of each other.
72
FINDINGS
The survey has become the important tool for any company because this will give the clear picture of
where the company stands in the market and what amount of effort they have to put for the purpose of
becoming a market leader in their respective segment. Here, the effort is done to know the market
position of the Nirma Shudh Salt and what should they do to increase the standard of the product.
Following are some of the findings that are concluded from the survey.
1. Awareness about the iodized salt:
Almost 92% of respondents are aware about the benefits of the iodized Salt. People in developed
areas are purchasing the branded edible salt regularly but people of backward area or outskirts
area, though aware about the benefits of iodized edible salt, are not purchasing the branded salt
because of the price consideration. And according to the retailers also more and more people are
coming with the specific brand name and that is why i can say that the awareness about the
iodized salt with the specific brand name has been increased.
2. Awareness about the specific brand of edible salt:
While talking about the brand awareness of the edible salt, Tata has the advantage of oldest
existence in the edible salt market, which will make them the most successful Edible Salt Brand in
the market with 33% of Iodised salt market, which is followed by the Nirma Shudh Salt with 22%
of the Iodised salt market which shows that consumers are aware of Nirma Shudh Salt. Dandi and
Annapurna has also the advantage of brand awareness but the level of purchase by the customers
is very low as compared to Tata and Nirma.
3. Brand of edible salt used by the customers:
According to the retailers, Tata, Dandi, Nirma Shudh and local players are the main gainers of the
edible salt industry. Tata is being the market leader has the most influence on the market, which is
having 33% of market share. While the second position is gained by Nirma Shudh Salt with 22%
of market share. This is the brand which is having the advantage of good distribution network.
73
NIRMA Shudh Salt is the main competitor for the Tata. While talking about the Dandi which has
achieved a huge success because of the advertisement campaign made by them while Nirma
Shudh has been able to capture the market because of the price factor. Annapurna and captain
cook are the brands of HUL where captain cook has not done too much in these areas where as
Annapurna is preferred by the 15% of the respondents.
4. Repeat purchase of branded edible salt:
There are more than 69% of the people are using the same edible salt brand in their daily use.
Here also Tata has the advantage of brand loyal customers because the brand has the advantage of
long-term existence in the market. While talking about the Nirma Shudh Salt, there are 62% of the
respondents are using same salt always. The reason behind the use of edible salt regularly is the
saltiness, price and double refined salt in it. Generally the purchase frequency of the edible salt is
1 Month for 2 kg of the packets of the average family size of 5.
5. Features preferred in edible salt brand:
It has been observed from the survey that the most influential factor for selecting any brand of
edible salt is taste, price, free flow and brand name. Tata is the only brand that is purchase on its
brand name also because of the long-term existence in the market. While talking about the Nirma
Shudh Salt, along with the price, free flow and taste, double refined salt property is also plays an
important role in the purchase decision of the brand. As the company is trying to sell its product
according to the income level of customers, the price will play a major role.
6. Purchase decision maker and purchase outlet:
It has been observed that wife (34% of respondents) generally takes the purchase decision because
she is the person who handles the kitchen and care for the family. And the provision store (46% of
respondents) is the main outlet for purchasing the edible salt. So the company who wants to make
its presence in the market must advertise the product targeting at the elder women and care for her
family and must give some trade promotions to the retailers because they are the main influencer
for buying the edible salt.
74
7. Major Influencer of purchasing of edible salt:
Tata, Annapurna and Dandi are the companies, which are competitor of Nirma Shudh Salt . Their
advertisement are made in such a way that it has created a huge success, for the company as
Dandi has achieved a significant success in a very short span of time and Tata by giving
emotional advertisement campaign, created a great success for their company. While talking
about the major Influencer of the Nirma Shudh Salt, the television advertisement is playing the
major role. Almost 51% of the people are influenced by the advertisement. According to the
survey, the people who are watching the advertisement of Nirma Shudh Salt has found it Good to
Average. So the level of satisfaction with the brand advertisement is normal. The second position
is gained by the retailers who are making the decision of stocking of any product according to the
schemes given by the respective companies. Thus in two ways, Nirma can influence the
customers either by giving customers schemes that is right now given by the company or by the
trade promotion. Retailers are the key for success in this industry.
8. Distribution network:
All the companies that exist in the edible salt market have the advantage of effective distribution
network. Even the local players have also the same advantage. Tata and Nirma Shudh Salt are the
major players who have the advantage of the effective and most successful distribution network.
However, those companies, which are not able to supply the product on time, have the
disadvantage of loosing the market share. To be successful in the edible salt market, the
distribution network of plays a major role. While talking about the Nirma Shudh Salt, the
company has already established the effective distribution network for their other products like
Detergent, Soaps etc and the same distribution network will apply for the edible salt also. Thus
the company has the advantage over the other local players. When asked to the customers about
what to do at the time of non-availability of Nirma Shudh Salt, most of the reply was to change
the brand of the salt. Thus it has been observed with Nirma Shudh Salt that whenever there is a
shortage of Nirma Shudh Salt, people will switch over to the other brand that is not the case with
the brand Tata because of its brand loyal customers. Nirma has not been able to establish this kind
of customers yet.
75
9. Educational & income level with the edible salt brand:
Talking about the educational as well as income level of the edible salt users, as the people are
becoming more educated and more income earner, the brand preference will switch towards the
national and quality brand. Thus the people with the lower income and less educational
background will switch towards the unbranded and loose salt and some extent towards the Nirma
Shudh Salt because of its less price. People with higher income and more income will generally
go for the products like Tata, Nirma Shudh Salt, Annapurna and Dandi. Thus the income as well
as the educational level has played a major role in the selection of the branded salt.
10. Perception of retailers towards the different edible salt brand:
It has been observed that the retailer is the main influencer for any brand of edible salt. Tata has
been the favorite brand for any retailers because of its highest market share and for its quality.
Nirma Shudh Salt has achieved the second position in the minds of retailers because of its highest
margin. Dandi is becoming the third major product for their portfolio because of its quick success
in a quick period of time. However, Annapurna has also done some good business in some
surveyed areas but cannot influence the retailers to store that brand. Local marketer has also a
huge success in the rural market because of its lowest price has also place in the retailers’ stock of
edible salt. While talking about the Nirma Shudh Salt, the retailers are maintaining the stock
because of the scheme they are providing to the retailers and to the customers and the highest
margin.
76
SUGGESTIONS & RECOMMENDATIONS
Nirma Shudh Salt is doing a good job by providing the customers a quality product with lesser price, as it
is their policy to provide customers values for their money. But every company is lacking somewhere. So
following are some suggestions, which will play an important role for the company to become a
successful player in a competitive market.
Television advertisement targeting at the women taking care of her family has the best influence
on the market so try to promote that brand from Advertisement message only.
Price, Double refined salt, free flow and taste are the four major factor for the Nirma Shudh Salt
from which the company can able to influence the customers.
The level of saltiness must be reduced to some extent. It has been observed that women who are
using Nirma Shudh Salt, has the complain of saltiness.
Retailers are the main influencers for the purchase decision of edible salt. Thus try to provide as
many trade promotion schemes as possible And keep on with the scheme of highest margin, as it
will encourage them to sell more product of the company.
According to the retailers, those companies, which will give them the highest trade promotion
schemes, have the advantage from them. Thus more trade promotion more will be the selling of
the product.
Do not sell the salt at different price in different areas according to the income or educational
level of the customers, as it will create a question in the minds of the customers about the quality
of the product.
Try to maintain the distribution network as effective as it is now. Because people will buy only
that product which will be available in the market at the time of purchase.
The people with educational level of 10th pass to graduate and income level between Rs. 5000 to
Rs. 10,000 are the main target customers for the Nirma Shudh Salt.
77
Provision store or nearby shop are the two main domains for the purchase of edible salt. Thus try
to make strategy by considering them in a very effective manner.
Fortune Salt of Adani, Saffola from Marico Industries, Surya Salt, Nature Fresh and different
unbranded players are the major threats to the company with the existing players like Tata, dandi,
Annapurna, Captain cook etc.
78
BIBLIOGRAPHY
REPORTS:
• Annual report of the Nirma ltd.
• Salt Industry report 2008-09
WEBSITES:
Bibliography (1) (JHALA, 2009) JHALA, D. (2009). THE STATUS OF SALT INDUSTRY IN INDIA. 2nd International Conference on the Ecological Importance of Solar Saltworks, (pp. 1‐10). Yucatan, Mexico,.
(2)sales industry,Retrieved JANUARY 17, 2010, from /www.salttradeindia.com: http://www.salttradeindia.com/?gclid=CP20wpCZn6ACFcxR6wod42CTa
(3) Retrieved february 19, 2010, from http://www.economywatch.com/business‐and‐economy/salt‐industry.html
(4) current issues. Retrieved february 21, 2010, from http://www.google.co.in/url?sa=t&source=web&ct=res&cd=3&ved=0CBEQFjAC&url=http%3A%2F%2Fwww.saltinstitute.org%2F&rct=j&q=Salt+Industry&ei=OEmkS76JMIeglAel28V0&usg=AFQjCNE9f2n56a4XRKtGbx‐T_HI4VXMeHw
(5) Retrieved march 10, 2010, from http://en.wikipedia.org/wiki/Salt salt industry. (n.d.). Retrieved february 21, 2010, from http://www.economywatch.com/business‐and‐economy/salt‐industry.html
(6) salt industry. (n.d.). Retrieved march 10, 2010, from http://www.saltinstitute.org/Production‐industry/Salt‐industry
(7) The Salt Industry Worldwide. (n.d.). Retrieved march 15, 2010, from http://www.cea‐life.com/minerals_health/salt_industry.htm
79
(8)Philip Kotler, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha,(2009) marketing management:
Pearson Education Publication
(9)Rajiv Batra, John G. myers, David A. Aaker,(1998) marketing management: Prentice-hall of India
Publication
top related