How did Nirma achieve this market share?

• Marketing

• Distribution

• Nirma, a marketing miracle!

• Initially, no ads, “word of mouth”

• 1972, First advertised, on AIR

– “Doodh si safedi” (“White as milk”)

• How about Distribution Channels of Nirma?

• Page 15, Establishing an efficient & resourceful network of distribution

• Single layer

• In low cost game, play volume game to make respectable profits

Market share has to increase in volume game

• What are the frequently used strategies to improve the market share?

– Being industries low cost provider

– Differentiation such as higher quality, technological superiority

– Focus on Market Niche

– Developing expertise that rivals can not easily copy

• Positioning

– “Quality Product for an affordable Price”

– Detergents formed only 10% of fabric wash (1970)

– If large percentage of fabric wash today is detergent, Nirma certainly has contributed to this change

• Did Nirma, unknowingly, adopt a “Blue Ocean Strategy”?

• The success of Nirma can be attributed to the four pronged strategy (p 20):

– Aggressive pricing without compromising on quality

– Presence in almost sub-segment of market

– Visibility of the Umbrella brand “Nirma” helping to cut the advertisement cost

– Strong marketing network enabling products to be available across two million retail outlets

• What are the Strategies for SMEs like Nirma?

– See “Do SMEs need to strategize?” by Govinda Sharma,

– Niching strategy

– Free Riding Strategy

– Forming Strategic Alliance

• To gain competitive advantage or deter them from adopting aggressive strategies

• See “Circumventing entry barriers into soft drink Industry”, P 45 of text

• See “Private Label Strategy” by Nirmalya Kumar and Jean Benedict, HBS publication

• Niching strategy

– Filling market gaps by offering products differentiated from, but substitutable to, that of bigger rivals

– Quality at an affordable price

• Free Riding Strategy

– Exploiting the market development of the bigger rivals by offering products similar that offered by the rivals

– Page 14 of HO, “Indian middle class wife had been ….How much ever she tried, it was a product quite out of reach….”

– 1960s: Surf Rs 15 per kg, Nirma: Rs 3.5 per kg

• Nirma was 4.29 times cheaper!

• Forming Strategic Alliance

– To gain competitive advantage

• See the case of “Circumventing entry barriers in soft drink industry”, p 45 of text wherein Cott Corporation formed a strategic alliance with WalMart to beat Coca Cola and Pepsi

– Deter rivals from adopting aggressive strategies

• Deer around elephant

Why did the market share drop?

• Reaction from the bigger players

• HUL’s operation STING

• Page 14: Strategy to inhibit Nirma Growth

• Page 15: Counter offensive

• Wheel at Rs 14 against Nirma’s Rs 13 per kg!

How is Nirma re-branding itself?

• The brief given to the agency by Nirma was to create an advertisement that matches up to the increasing aspiration levels of its customers and give it a modern look

• The new commercial has retained the girl in the frock who appears toward the end of 60-second television commercial