Case Studies and Management Resources
Asia's Most Popular Collection of Management Case Studies |
 |
Case Studies and Management Resources
Asia's Most Popular Collection of Management Case Studies |
|
 |
Unlike detergents, the soaps and shampoo market was highly fragmented. There were about 15-20 brands, and it was difficult for any soap to get a sizable market share. Moreover, this market was less price sensitive. So, it was difficult for any company to sustain itself on price alone. Analysts felt that it would take years to change Nirma's brand image. According to a survey conducted by Samsika Marketing Consultants, Nirma's marketing firm, Nirma was considered to be a cheap brand. Many people were almost ashamed to admit that they were using it.
|
To shed this image, in the late nineties, Nirma released corporate advertisements worth Rs 10 bn throughout India. Analysts felt that the fast growing shampoo market was a better bet than the premium soaps market. In India, only 30% of the population used shampoos and more than 70% of this group was in the urban areas. However, according to some analysts, though the perceived potential of the rural market was very high, in actual practice, it was difficult to persuade rural folk to use shampoos. Another problem Nirma faced was that of inadequate infrastructure. Though it had a strong presence in the smaller towns and villages, it lacked the network necessary for penetrating urban areas. Thus, Nirma's entry into premium soaps and shampoos seemed to have failed. |
Though Nirma was better known as a producer of low-cost economy range of products, it was successful in the middle- and up-market segments. But at the same time, competition was also increasing. While HLL continued to be a major competition, P&G and Henkel SPIC also adopted aggressive measures10. Players from unorganized sector were also adding to the competition in the detergents and washing powder industry. However, Patel was confident of tackling the competition. He said, "We hold the price line and the satisfied consumer naturally reverts to us." In the past three decades, the brand had grown in value and volume on the basis of his success formula: "A customer does not look for one-time frills or feel-good factors. Rather, the householder wants a long term solution to his or her needs." What remained to be seen was whether Nirma's cost-focussed model would be a success in the long run.
Exhibit I:
10] Henkel SPIC had turned aggressive in the middle and upper ends of the market. The acquisition of Calcutta
Chemicals and Detergents India, placed Henkel in a stronger position to tackle competition. In 2000, it also forayed
into the toilet soap segment with its Fa range of products.
Case Code : MKTG008
Themes: Marketing Mix
Case Length : 8 Pages
Period : 1985-2001
Organization : Nirma, HLL
Pub Date : 2001
Teaching Note : Available
Countries : India
Industry : FMCG
Business Strategy
Finance
HRM
Insurance
IT and Systems
Marketing
Operations
Leadership
More Case Studies >>
Business Environment
Business Ethics
Business Strategy
Human Resource Management
IT and Systems
Marketing
Operations
Micro Case Studies >>
Micro Case Studies
Free Case Studies
Articles
Interviews
Book Reviews
Glossary
Online Quiz
More Free Resources >>
Best Selling Case Studies
Business Case Studies
Learning With Case Studies
Cases Used in Textbooks
Prize Winning Case Studies
More Case Studies >>