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By : SUSHANT AWASTHI, BUSINESS OPERATIONS-HEAD, Golden India Financial Services
Industry : Consumer Durables Functional Area : Success Stories
Keywords :

karsanbhai patel

Activity:  30 comments  18299 views  last activity : 07 09 2011 13:47:32 +0000
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The nirma success story of how an Indian Entrepreneur took on the big MNCs and rewrote the rules of business :

It was in 1969 that Dr. Karsanbhai Patel started Nirma and went on to create a whole new segment in the Indian domestic detergent market.During that time the domestic detergent market only had the premium segment and there were very few companies , mainly the MNCs , which were into this business.

Karsanbhai Patel used to make detergent powder in the backyard of his house in Ahmedabad and then carry out door to door selling of his hand made product.He gave a money back guarantee with every pack that was sold.Karsanbhai Patel managed to offer his detergent powder for Rs. 3 per kg when the cheapest detergent at that time was Rs.13 per kg and so he was able to successfully target the middle and lower middle income segment.

Sabki Pasand Nirma…

Nirma became a huge success and all this was a result of Karsanbhai Patel’s entrepreneurial skills.

Karsanbhai Patel had good knowledge of chemicals and he came up with Nirma detergent which was a result of innovative combination of the important ingredients.Indigenous method was used ,and also the detergent was more environment friendly.

Consumers now had a quality detergent powder , having an affordable price tag.

The process of detergent production was labour intensive and this gave employment to a large number of people.Nirma focused on cost reduction strategies to make a place for itself in the market.Nirma has always been known for offering quality products at afforbable prices and thus creating good value for the consumer’s money.

In the 1980s nirma moved ahead of Surf , a detergent by HLL , to caputre a large market share.Later, Nirma successfully entered in the premium segment of soaps and detergents.Nirma went on to become the largest detergent and the second largest soap company in India.Nirma had more than 35% market share in the detergent segment and around 20 % market share in the toilet soap segment.The company got listed on the stock exchanges in the year 1994.

Nirma adopted backward integration strategy for the regular supply of raw materials,90 % of which they manufacture themselves.Nirma also gave due importance to modernization ,expansion and upgradation of the production facilities.The company also made sure that it uses the latest technology and infrastructure.

As far as Corporate social responsibility (CSR) is concerned, Nirma has made some good efforts by starting Nirma Education & Research Foundation (NERF) in the year 1994 for the purpose of running various educational institutes.Nirma has also set up Nirma labs , which prepares aspiring entrepreneurs to effectively face the different business challenges.Nirma also runs Nirma Memorial Trust ,Nirma Foundation and Chanasma Ruppur Gram Vikas Trust as a part of their effort as a socially responsible corporate citizen.

The company that was started in 1969 with just one man who used to deliver his product from one house to the other,today employs around 14 thousand people and has a turnover of more than $ 500 million. In 2004 Nirma’s annual sales were as high as 800000 tonnes.According to Forbes in 2005 Karsanbhai Patel’s net worth was $ 640 million

 Top Comment : Himanshu Pathak   | 04 22 2009 13:28:45 +0000
Hey didn't knew that Nirma product had so much behind it, but i always liked the ad when i was kid....great to know the facts..thanks for sharing once again sushant.
 
29 comments on "SUCCESS STORY OF NIRMA"
  Commented by  Peeyush Chauhan, Associate/Sr. Associate -(Technical)    | 07 09 2011 13:47:32 +0000
small package..big dhamaka..ever interesting case study at MBA..
  Commented by  Peeyush Chauhan, Associate/Sr. Associate -(Technical)    | 07 09 2011 13:44:15 +0000
small package..big dhamaka..ever interesting case study at MBA..
  Commented by  vikas jain, CEO/MD/Director, shree nath ji institute of technology &engineering college nathdwara    | 03 14 2011 16:16:48 +0000
excellent story ,thanks for this story
  Commented by  Chintan Vyas, B.Tech/B.E. student, Shivajirao S. Jondhale college of enggineering    | 01 12 2011 19:33:14 +0000
Yeah after reading this story ... I really am proud to say "HUM SABKI PASAND NIRMAAAAA.................."
  Commented by  sai kiran M, B.Tech/B.E. student, drk college of engineering    | 07 20 2010 13:48:03 +0000
Rating : +1 
Very much inspiring.
  Commented by  Amit Kumar, Design Engineer, Bharat Heavy Electricals limited    | 02 28 2010 12:45:57 +0000
Backward Integration has been a great phenomena for most of the small companies to consolidate and expand their market position.Videocon is another success story which followed the same back integration by buying Thompson Picture tubes company to gate economy of scale and sustain its growth while most of the companies who were in market along with Videocon lost their sheen later like BPL,market leader once due to price they quoted and moreover were unable to control quality of the supplied products.Its a good lesson for India Inc. to follow.
  Commented by  malladi madhukumar, AGM -MKTG, Andhra Cements Ltd    | 12 14 2009 15:59:27 +0000
Rating : +1 
Inspiring, Educative, A good case study for aspiring enterpenuers, and marketing faternity
  Commented by  Sonam Kapoor, Software Developer, IBM    | 10 16 2009 12:34:29 +0000
Nice article Sushant, really very informative...Thanks for sharing...
  Commented by  Kumbakonam S Venkataraman, Associate Editor, Dynamic Youth online magazine    | 10 15 2009 23:58:12 +0000
Rating : +1 
'Creating artificial demand and then using it as a springboard for increasing the market share' is a very good strategy that has been often used by business houses.  Even for the established products, 'creating artificial demand' is opted before effecting a price increase. But these strategies would be of any use, if - only if - the quality of the product is relatively good. In the case of Nirma this condition has been fulfilled; so the strategy worked. The strategies are not substitutes for quality of the product. When we discuss success stories, it is important that we give adequate emphasis to the 'quality' aspect also. 
  Commented by  Munawer M Surve, Commercial Manager, KEC INTERNATIONAL    | 10 14 2009 07:55:27 +0000
nice inspiration
  Commented by  sunil bakshi, CEO/MD/Director, Different Strokes Designs Pvt. Ltd.    | 10 13 2009 12:54:47 +0000
Rating : +4 
Hi everyone,
Great story, yes but i would like to add another twist to the story that will actually clarify the genius of Karsanbhai.
 Now this part was shared during my institute days and i would not know how far that was true but it seemed very close to the truth because the story exactly pointed out the way the FMCG sector operated (may be today also) in those days.
The story is like this-
As Nirma started to grow and the salesmen started to reach out to the retailers, who were working with multinational brands till then, did not pay attention and used to take the stock on long credits and as a very very spl favour. As and when the salesmen would go asking for the payment either he will be shown the door or may be offred a part payment even in the condition that the total matl was sold. To the insisting ones they will give the matl back asking them not to show up again. This carried on for some time and there was huge accumulated credit in the market making it difficult for the Nirma to operate. This is when Karsnbhai said enough was enough an called the entire team one day an decided on a drastic step which was risky but revolutionary. Karsanbhai was realizing the power of advertising and promotions which made him take this step.
The day after the meeting all the team member went out in the market and collected either cash or material. Next day on retailers were shocked , competition was dazed and market was without Nirma. For full one month the media was carpet bombed with the campaign WASHING POWDER NIRMA, WASHING POWDER NIRMA, DOODH SI SAFEDI......
Now what this did was kick start the consumer demand. People started asking for Nirma but it was not to be found. When the demand became high decibel then the Retailers started to look for Nirma. This is what Karsanbhai was waiting for.
One fine day the team was called for another meeting and Delivery vans were cleaned , matl loaded and NIRMA hit the market. Now Nirma was dictating terms. All cash on delivery, no credits and tight supply. Overnight the brand was changed and within no time gave a fantastic fightback to the leading global brands.
The best case of - Give your consumer what he wants, when he wants, where he wants and at the price he wants, selling will be automatic.
And the rest as they say is history.....
  Commented by  SUNIL GHAI, R.S.M, PURI OIL MILLS LTD.    | 10 13 2009 06:14:29 +0000
GREAT & INSPIRING 
  Commented by  Devi Kaladeen, Audit Manager, Health Sector Development Unit    | 10 13 2009 04:29:58 +0000
Very nice article. Thanks for the referral.
  Commented by  abhinav kumar, channel handling, hul    | 10 12 2009 17:56:19 +0000
actually the great success story,one thing that made Karsanbhai Patel a successful person that was his clear vision of his strength that is a good knowledge of chemical.Most of the people could not discover his strength and get failure.
  Commented by  syed Rehmat shah, B.B.A student, Preston university kohat    | 10 12 2009 15:11:26 +0000
thank u for success story of nirma ...i got good concept from your story....
  Commented by  Sunil Kumar, Product Executive, BASF Construction Chemicals India Pvt. Ltd    | 10 12 2009 10:02:47 +0000
Good and insiring actually this the story of most of the brand. Brand image can't be created by overnight its continue efforts in satisfaction of the Consumer. Brand will be successful or failiure thats depends upon the segments of Consumers we are targeting we should plan to satisfy that segment and keep upgradation in product as the trends of Consumers change, Nice keep on giving this type of Example 
  Commented by  Japan Shah, Assistant Professor, Omegan School of Business    | 10 12 2009 08:46:31 +0000
Good Insight Sushant, the best part is he is a very down to earth person . . .
  Commented by  varsha, technical manager(QMS)    | 10 12 2009 03:07:44 +0000
Nice.....This is called  to be a real  success story behind the brand and what it left in the mind is  its impression and struggle of an Enterprenure and his sincere affords behind it.. its very inspiring.. thanks for article susant.. and thanks for referral  veejay sir 
  Commented by  kcmansa, Sale and Marketing Manager, Sumitomo Chemical    | 10 11 2009 12:42:09 +0000
Rating : +1 
Nice success story about Nirma , adding to the fact thats TV commercial played a very big role in Nirma story , on those day Ramayna and Mahabharta TV serial given the big boost partiliculerly in village level , group of 50-60 people were used to see thats serial in a group and i remembered during break all were singing thats SABKI PASAND nirma .... and thats why thats brands was able to penitarte in maximum Indian mind .
We wish the same success to Nirma.Thanks 
  Commented by  pooja gupta, HUMAN RESOURCE MANAGER, -    | 10 11 2009 09:17:08 +0000
Rating : +1 
good information.thanks for that.
  Commented by  Shirish Beke, iDEATiON, Management & Financial Consultants    | 10 11 2009 00:02:53 +0000
Rating : +1 
nice information
  Commented by  krunal, MBA/PGDM student, Parul    | 10 06 2009 14:16:39 +0000
Rating : +1 
nice information
  Commented by  Ramakrishna Perumal, Sr. Engineer, Technicas Reunidas    | 10 06 2009 13:55:14 +0000
Rating : +1 
Good information, Mr.Patel must have worked very hard to bring the brand name to the present position. I think the AD song also contributed very much to the brand name.
 
  Commented by  Ramdas Pawar, Sales/BD Manager, Flex    | 10 06 2009 11:37:28 +0000
Rating : +2 
The biggest thing which made Nirma a big hit was its song "Washing powder Nirma". This was the song which every body wanted to wanted to watch. Only this song multiplied its rate of promotion into a lot extent making it a big success...
  Commented by  wasim akbar lone, student, BBA    | 10 05 2009 18:01:05 +0000
Rating : +1 
highly inspiring for young generation to do great things in life
  Commented by  Heman, MANAGER, AGC    | 04 25 2009 09:16:31 +0000
Rating : +2 
 Nice to see that the success stories are getting it published in these kinds of network. People like me might have heard about it. But for the younger generation, documented evidence will be a more eye appealing and can generate an inner urge for doing some kind of experiments. 
Good work and keep posting. U can reach me at hkoopat@gmail.com
  Commented by  Karamjeet Singh Saluja, INTELLECTRUAL PROPERTY RIGHTS CONSULTANT, CARE PRO BIOSCIENCE (P) LTD    | 04 23 2009 04:40:58 +0000
Rating : +2 
good story. thanks for sharing with us. keep writing .
  Commented by  Makrand Bhave, Sales Promotion Manager, Camlin Limited    | 04 23 2009 04:14:25 +0000
Rating : +2 
Amazing success story this. Tells us the passion and commitment that Mr. Patel displayed in making Nirma a household name!! Thanks Mr. Awasthi.
  Commented by  Himanshu Pathak, Coresspondent, Zee    | 04 22 2009 13:28:45 +0000
Rating : +2 
Hey didn't knew that Nirma product had so much behind it, but i always liked the ad when i was kid....great to know the facts..thanks for sharing once again sushant.
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