Nirma began operations as a one-product, one-man start-up in 1969 and has grown into a Rs 48 billion company within four decades. The company currently has multiple manufacturing facilities and most of its products are under the Nirma brand umbrella. The company?s mission to provide ?Better Products, Better Value, Better Living? has made a significant contribution to its success. Nirma countered competition from HLL and carved a niche for itself in the lower end of the detergent and toilet soap market.
Nirma?s washing powder was extremely competitive. It was priced at Rs 3.50 per kg, at a time when HLL?s Surf was priced at Rs 15. Gradually, Nirma started penetrating into HLL?s market share. By 1985, Nirma washing powder had become one of the most popular detergent brands in many parts of the country. By 1999, Nirma was a major FMCG brand, offering a range of detergents, soaps, and personal care products.
Nirma?s success can be attributed to its product promotion efforts. These were mostly trade promotions, that is, huge margins passed on to retailers. For example, for Nirma premium soap, the company offered 52% and for Nirma shampoo, it offered an unbelievable margin of 140% to retailers. The company also focused on its distribution reach and market penetration to complement its promotion of efforts. Nirma?s network consists of more than 400 distributors and over 2 million retail outlets across the country. This huge network enabled Nirma?s products to penetrate into points of sale in the smallest village.
Excerpts from ?Strategies for Growth?, a book on helping one?s business move up, by Atanu Ghosh, dean (alumni & external relationships), IIM, Ahmedabad