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BACKSTORY: The Nirma charge that changed Hindustan Levers

BACKSTORY: The Nirma charge that changed Hindustan Levers

BACKSTORY: The Nirma charge that changed Hindustan Levers
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By Sundeep Khanna  Apr 19, 2021 8:11:32 AM IST (Updated)

It is to HUL’s credit that it used the nudge from Nirma to rejig its own product portfolio and pricing to launch an able rival.

Some David versus Goliath tales have a slightly different ending. One such story is that of Nirma’s seemingly unequal battle against reigning giant Hindustan Unilever (then still called Hindustan Levers Ltd.) in the 1980s.

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In 1969, Karsanbhai Patel, a chemist at the Gujarat Minerals Development Corporation, set up a small household business. His product, a detergent powder, wasn’t unique in itself. For years, HLL had sold high-priced powder to well-heeled customers while the less affluent had to make do with the drudge of soap bars. Karsanbhai spotted an opportunity there. Having started off by making the detergent in the rear of his house in Khokra near Ahmedabad and then going door to door to sell it, he understood that in the poorer households it was mostly the women of the house who did the washing. What they needed was a detergent that was cheap, yet didn’t damage clothes and even more their hands.
With that simple insight, he launched a product that was about 75 percent cheaper than comparable products from MNCs like HLL. To achieve this he stayed in the small scale businesses category while at the same time manufacturing in-house almost all the ingredients that went into the final products.
Over the next 10 years, Nirma became the largest player in its segment. But not content with that, Karsanbhai launched a full-frontal assault on HLL by launching a beauty soap, a category where the Anglo-Dutch MNC had few rivals. It was a carefully calculated move and it reaped rich dividends. Not only did Nirma become a strong number two in the category, but it also acted to widen the scope of its competition to its rivals.
In all this, Nirma, a barely recognized brand at the start of its journey, used smart, targeted advertising to great effect. Its first jingle in 1982 created by its agency Purnima Advertising and featuring Karsanbhai’s beloved daughter in a frock as white as milk was memorable for its simple direct message. The twirling little girl, Nirupama, became Nirma’s mascot and it turned the Jayas and the Sushmas into loyal customers. Sadly though she passed away in a tragic accident.
It is to HUL’s credit that it used the nudge from Nirma to rejig its own product portfolio and pricing to launch an able rival with which it clawed back much of the market advantage Karsanbhai had seized for Nirma. The MNC launched Wheel at a price point that neutralized Nirma’s key advantage and wrested back its pole position in the lowest segment of the market to go with its leadership in the premium and mid-range segment where it's Surf and Rin jockey for leadership with P&G’s Ariel and Tide.
Ironically, years after Nirma upended the incumbents, another upstart, Kanpur-based Rohit Surfactants turned the tables on existing heavyweights with its launch of a new detergent brand called Ghari aimed primarily at rural and lower-middle-class customers. Not surprisingly Ghari followed Nirma’s playbook of keeping prices low and aiming at customers at the bottom of the pyramid. By 2011 Ghari was jockeying for leadership of the laundry soap business.
—Sundeep Khanna is a former editor and the co-author of the recently released Azim Premji: The Man Beyond the Billions. Views are personal
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