The Nirma Story

• Brand Wars - YES Contd...

So, Nirma positioned Nirma Bath against Lifebuoy⁵, Nirma Beauty Soap against Lux⁶, Nima Rose against Breeze⁷, and Nima Lime against Jai Lime⁸. Explaining how Nirma hoped to win this game, playing by HLL's rules, Hiren said, "World-wide, there are only four or five platforms – floral, beauty, health, freshness – which account for most of the soaps sold." Nirma produced high-fatty-matter⁹ soaps with the right scents, and priced them much lower than other brands. This created the 'sub-premium' segment. Nirma also mastered the game of managing the geographical diversity of consumer preferences.

For instance, the North preferred pinks soaps and while the South preferred green ones. Sandal soaps were more popular in the South. Initially, the advertising spend of the company was very low, as compared to other FMCG companies. Nirma spent only 1.25-2% of its turnover on advertising as compared to the normal 6-10%.

For endorsing soaps, the company used starlets like Sangeeta Bijlani, Sonali Bendre, and Riya Sen, who were relatively unknown at that time. The advertisement messages were also very simple and focused on the benefit of the product. Nirma always preferred to place the product on the shelves first, receive feedback, and then create an enduring ad campaign.

While introducing toilet soaps and detergents in the premium segment, Nirma relied on its time-tested weapon – Price. The company planned to concentrate on volumes in these segments as well. But there was a change in the margins given to retailers. Unlike the economy products, where the cost benefits were passed on to the consumers, Nirma passed on this benefit to the retailers. It gave them huge margins. For instance, for Nirma premium soap, it offered 52% and for Nirma shampoo, it offered an unbelievable margin of 140%. Analysts were skeptical about Nirma's chances of success in the premium segment of the soaps market.

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5] Popular brand of carbolic soap from HLL

6] Popular brand of beauty soap from HLL.

7] HLL's brand in the floral soaps category.

8] HLL's lime brand. The premium product in this category was Liril, which was countered by Nirma Lime Fresh

9] High-fatty-matter soaps are high in lather quality

Case Details

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

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