The Rise & Fall of Nirma

“Washing powder Nirma, Washing Powder Nirma”, this jingle can make every 90s kid go down the nostalgia lane. Nirma, an FMCG company, once a successful brand and a strong rival of Hindustan Lever limited (Currently named as Hindustan Unilever (HUL)), still maintains a strong brand image in the minds of Indian consumers. But despite its formidable market presence between 1970 and 2000, it is now in the declining stage of its product life cycle.

Nirma was born when a chemist (Mr. Patel from Gujarat) manufactured a phosphate free detergent and started selling it locally. It was the time when the Pioneer of Detergents, Surf (a product of HUL) priced its product at Rs.15 per Kg. As Nirma was priced at Rs.3.5 per kg, it rapidly became popular in the rural market and acquired the status of a beloved “Low-cost value-for-money” household detergent in the minds of the consumers.

In the 90s, the popularity of the brand made it attain 15% of market share in India while Surf was the undisputed champion of detergents with 65% market share and targeted premium segment. Nirma, despite being a household name for detergents, started manufacturing beauty soaps and widened its portfolio by introducing salt, soda ash, and scouring products.

The Unbranded competition

It spent only 3-4% of revenue for Marketing communications (Advertisement campaigns) while other companies spent 6-8% on advertising. Nirma followed the same campaign throughout the years and it started advertising its beauty soaps with Sonali Bendre, who was not very popular at that time. These were the classic times in marketing when your brand ambassador would reflect on your brand image.

Nirma gained a market share of 38% in the year 2000, beating Hindustan Unilever’s product Surf, the share of which got reduced to 31 per cent.

Nirma started widening its portfolio again by introducing hair care product line such as Shika kai shampoos and tooth pastes. The company followed the same strategy of “low cost, value for money”.

The Fall Season

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

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

Currently, Nirma is concentrating on Nirma cement as its FMCG body care products are not gaining acceptable profits and has made its product portfolio even wider.

What made Nirma jump from the hill?

  • Lack of innovation – Nirma failed to innovate its product line as they considered themselves a market leader and failed to observe the environment.
  • Diversification – They diversified by widening the product portfolio; failed to feel the pulse of the market as diversification did not help them.
  • Consumer Perception – Consumers perceived Nirma as an inferior brand as its products were available at a low price.
  • Lack of Focus –  Nirma failed to understand what they are good at.

Rescue the Fall

  • Nirma’s success lies in detergent products and that segment started declining when it tried to introduce products in other product lines.
  • Nirma still has the brand recall in the minds of Generation Y and thus, Brand Revitalization is possible.
  • Brand Revitalization can be done by repositioning the existing products and introducing new and innovative product variants in the same product lines. The advertisement campaigns can be organized in a way to induce nostalgia into customers for its re-entry.

Challenges

The major challenge for Nirma lies in penetrating the premium segment of the market while maintaining a strong presence in the low price segment

 

Author: Arvind K

PGDM, Class of 2018, Great Lakes, Gurgaon

[Reference- Statistical data and brand insights from #Live mint #Business Standard #Economic Times]

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