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91029 fmg18 a

  1. 1. Success Story of Nirma A Case study on Karsanbhai Patel His is a legendary rags to riches journey during which he shattered established business theories and rewrote new ones. ● ● ● Karsanbhai Khodidas Patel (K.K.Patel) is a befitting example of a self made man. Coming from a humble farmer family he understood the need of the masses to serve a segment that was neglected but at the same time highly profitable. He established a position for his firm in the lower income segment of the detergent market, overtaking many heavy weights and multinationals, to emerge as a winner. Literally, he made money by washing others’ dirty linens. He is the founder of the powerful brand ‘Nirma’ which he aptly positioned using all the 4 P’s of marketing (viz. product, price, place and promotion) to his advantage. ● ● ● Submitted to: Submitted by: Madhusudan Partani Dr. Anita Tripathi Lal FMG-18A 91029
  2. 2. K arsanbhai Patel was born into a farmer family in a small village called Mehsana, North Gujarat in the year 1945. Karsanbhai finished his B.Sc. speech marks as said by Mr. Patel clearly exhibits the entrepreneur, situation may quality of that be, is a whatever whatever successful the the in Chemistry at age 21 and worked as a lab circumstances may be, the passion and the technician, first in the New Cotton Mills, fervour can never be curtailed. Ahmedabad, of the Lalbhai group and then “The lack of any such precedent in my at the Geology and Mining Department of family made the venture fraught with fear the Government of Gujarat. of failure. But farmers from North Gujarat Entrepreneurship was in his blood and in are known for their spirit of enterprise” 1969, at a young age of 25 he embarked on a life changing journey which catapulted Though he was not from a entrepreneurial him into a mastermind businessman. He family, though no one in the family earlier addressed the needs of millions of Indian to him dealt into any venture, thus were consumers who had no choice but to kneel very highly risk averse and had a fear of before the limited number of options of failure. But the zeal of the venture has high cost detergents available in the Indian never allowed the circumstances to thwart market. his vigour and verve. He launched the brand “Nirma” named Karsanbhai set up shop at small workshop after her daughter Nirupama, in the year in an Ahmedabad suburb. The Nirma brand 1969. This was an after-office business the quickly established itself in Gujarat and one-man company would bicycle through Maharashtra. the neighbourhoods selling handmade The launch of ‘Nirma’ detergent powder detergent packets door to door. But later was special in many respects. It was made on, after the 3 years of firsthand from an indigenous formula, without using experience with the customer by having a phosphate, which was environmentally direct contact with them, he felt very friendly and not used by any existing confident in quitting his job. This shows detergent company. This made the how enthusiastic and also how passionate competitors sit up and take notice of he was in his dream venture. The following
  3. 3. ‘Nirma’. Also the detergent was launched products at affordable prices and thus at a low price of Rs 3/kg whereas the next creating good value for the consumer’s cheapest detergent at that time was Rs. money. 13/kg. The use of penetration pricing The high quality and low price of the worked for ‘Nirma’. In terms of detergent made for great value. Fuelled by distribution, Karsanbhai Patel started the housewife-friendly advertisement jingles, route of door to door selling which was an Nirma revolutionized the detergent effective way to reach the target segment. market, creating an entirely new segment The advertising campaign of ‘Nirma’ uses in for economy detergent powder. At the the jingle “Doodh Si Safedi Nirma Se Aayi” time, detergent and soap manufacture was is so popular among the masses, using the dominated by multinational corporations purity and colour of milk to symbolise the with products like Surf by Hindustan Lever, power of Nirma in a metamorphic manner. priced around Rs. 13 per kg. Within a Nirma became a huge success and all this decade, Nirma was the largest selling was a result of Karsanbhai Patel’s detergent in India. Since production was entrepreneurial skills. labour intensive, Nirma also became a leading employer (employing 14,000 Karsanbhai Patel had good knowledge of people 2004). Made without some chemicals and he came up with Nirma phosphates, Nirma was also somewhat detergent which was a result of innovative more environment friendly. combination of the important ingredients. Indigenous method was used ,and also the In the 1980s Nirma moved ahead of Surf, a detergent was more environment friendly. detergent by HLL , to capture a large market share. Nirma went on to become Consumers now had a quality detergent the largest detergent and the second powder , having an affordable price tag. largest soap company in India. Nirma had The process of detergent production was more than 35% market share in the labour intensive and this gave employment detergent segment and around 20 % to a large number of people. Nirma market share in the toilet soap segment. focused on cost reduction strategies to The company got listed on the stock make a place for itself in the market. Nirma exchanges in the year 1994. has always been known for offering quality
  4. 4. Nirma adopted backward integration In 1995, Karsanbhai started the Nirma strategy for the regular supply of raw Institute of Technology in Ahmedabad, materials, 90 % of which they manufacture which grew into a leading engineering themselves. Nirma also gave due college in Gujarat. An Institute of importance to modernization, expansion Management followed, with the entire and up gradation of the production structure being consolidated under the facilities. The company also made sure that Nirma University of Science and it uses the latest technology and Technology in 2003, overseen by the infrastructure. ‘Nirma’ Education and Research Foundation. To produce more such Karsanbhai Patel was an opportunist. After extraordinary entrepreneurs, the establishing its leadership in economy- Nirmalabs education project was launched priced detergents, ‘Nirma' entered the in 2004, aiming at training and incubating premium segment, launching toilet soaps prospective entrepreneurs. This prepares ‘Nirma’ Bath and ‘Nirma’ beauty soap, and aspiring entrepreneurs to effectively face premium detergent ‘Super Nirma’ the different business challenges. Nirma detergent. Ventures into shampoo and also runs Nirma Memorial Trust ,Nirma toothpaste were not as successful, but the Foundation and Chanasma Ruppur Gram edible salt ‘Shudh’ is another success story. Vikas Trust as a part of their effort as a ‘Nirma’ beauty soap is one of the leading socially responsible corporate citizen. toilet soaps, behind Lifebuoy and Lux. Overall, ‘Nirma’ has a 20% market share in soap cakes and about 35% in detergents. 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.
  5. 5. Awards and Accolades  In 2001, Karsanbhai was awarded an honorary doctorate by Florida Atlantic University, recognizing his exceptional entrepreneurial and philanthropic accomplishments.  In 1990, the Federation of Association of Small Scale Industries of India (FASII), New Delhi, awarded him the 'Udyog Ratna' award.  Honorary Doctorate by Devi Ahlya University, Indore  The Gujarat Chamber of Commerce felicitated him as an 'Outstanding Industrialist of the Eighties'.  He has served twice as Chairman of the Development Council for Oils, Soaps and Detergents.  Dr. Karsanbhai Khodidas Patel has been conferred with Padma Shri Award for the year 2010. The award will be formally conferred by the President of India Mrs Pratibha Patil.
  6. 6. References “Business Personality- Karsan Bhai K Patel,” A Presentation by NIRMA University http://www.nirma.co.in/genesis.htm visited on 11th, 13th and 15th July, 2010 http://www.businessblog360.com/2008/04/25/karsanbhai-patel-and-the-success- of-nirma/ visited on 12th July, 2010 http://www.iloveindia.com/indian-heroes/karsanbhai-patel.html visited on 11th July, 2010. http://en.wikipedia.org/wiki/Karsanbhai_Patel visited on 15th of July, 2010

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