An insight into why Ghari Detergent is a successful product, especially in the rural market of the country, its SWOT analysis, marketing mix, and Michael Porter;s Five Forces Model. Also, a suggestion on a variety of strategies which could be implemented to increase the reach and market share of the product, in reference with the Ansoff Matrix.
A PROJECT ON
INTRODUCTION OF GHARI DETERGENT
Ghari Detergent powder is manufactured by Rohit
Surfactants Private Limited (RSPL), a Kanpur based 3000
crore diversified conglomerate in India. The detergent brand
was founded by Muralidhar and Bimal Kumar Gyanchandani
It came to limelight in late 2012 when it beat HUL's Wheel
detergent and grabbed the top spot in terms of market share.
After 25 years of its inception, it took the top spot in the
detergent market. In November 2012, Ghari was the market
leader with a 17.4% share compared with Wheel's 16.9% and
The product was low priced and targeted at the rural
customers, middle class and lower-middle class customers. A 1
kg pack of Ghari detergent is priced at Rs 35 and a 2.5 kg
pack is priced Rs 85 only.
Two years ago, RSPL flagged off the 'Ghari Detergent
Express', a train whose exteriors are painted with Ghari
branding that ran between Lucknow and Guwahati for two
Ghari has spread its distribution network to more states now and
directly reaches rural markets, which is its biggest audience. It has
21 manufacturing units, 15 of which were added since 2006.
The tagline “Pehle istemaal karein fir vishwaas karein”
(Use it and
then believe it) which encourages trial and prompts repeat purchase.
Promotions are done through roadside shows, magic shows and
exhibitions in smaller towns and cities.
Ghari is for common man and usually it targets household wives. To
live in that spirit Ghari brand has avoided using any celebrity to
endorse it unlike wheel (endorsed by Salman Khan), Rin (Kajol), and
Ariel Oxybin (Kiran Bedi).
Strength:1. Market leader in the tier-3 & tier-4 segment of detergent market in India.
2. Strong reach to the rural consumer.
3. The tagline ‘Pehle istemaal kare fir wishwaas kare’ has struck a chord
amongst the price-sensitive mass market.
4. High push by retailers and high word-of-mouth amongst consumers.
5. Good branding through TVCs and print ads.
6. Indigenous brand name which is very associative with the rural masses
as well as those at the bottom-most segment.
7. Home market UP with population 167 million constitutes over 12% of
the country’s FMCG sales.
Weakness:1. Limited export market as compared to international brands.
2. Unable to completely penetrate in premium segment because of
3. Quality not very superior.
Opportunity:1. Entered western & southern India recently where a huge market
2. Further penetrate the rural market by collaborating with various
Threats:1.Low profit margins in detergent sector.
2.Threat from existing and new players in the market.
3.Huge conglomerates (HUL and P&G) with a large capital base and
strong presence in the detergent market to compete with.
Ghari detergent is a mediocre brand.
Significant features are resistance against moth and
shrinkage, no toxic chemicals present and it leaves a
pleasant fragrance in clothes.
It is formulated in accordance with the well-defined
parameters of the industry. To ensure flawlessness and
accurate results, it is thoroughly inspected before
dispatching to the customers' premises.
Variants are:Detergent cake - 340 Gms, 190 Gms, 95 Gms
Detergent powder - 3 Kg, 1 Kg, 500 Gms, 210 Gms,
Pricing is inspired by Nirma’s low-cost model. Ghari followed Nirma’s strategy of
keeping low price and targeting customers at the bottom of the market.
Keeping in mind its target market, i.e. the lower end of economy, the company
has, as far as possible, avoided passing on the burden of rising raw material costs
on to the customers.
Ghari provides a profit margin of 9% to its dealers, which is substantially lower
than the standard 12-13% for premium brands, and at the same time, higher than
the 6-7% being offered by the competitors in the same segment. Thus the company
has been working towards creating a strong dealer base while keeping its prices
It took the bold step of pricing at a 10% premium over HUL’s Wheel and Nirma - Rs
35 a kg as against Rs 30. It’s a brilliant gap that Ghari has found as it is priced above
mass brands like Wheel and Nirma but much below mass premium brands such as
Tide and Surf.
Before going national which would have spread its resources very thin,
RSPL focused on Uttar Pradesh to begin with, which has a population of
167 million and accounts for over 12 per cent of the country’s FMCG sales.
It focused on developing an intense distribution network to reach the
customers effectively, which is evident from the fact that out of 3000 dealers
in India, 900 dealers are in UP and 25 of them are in Kanpur alone. It has
almost 50% of its 21 manufacturing units in UP.
Ghari has spread its distribution network to more states now and directly
reaches rural markets, which is its biggest audience. In the past 3-4 years,
Ghari added 10 states to its distribution reach. The brand is now present in 19
states. A regional brand had suddenly gone national, reaching out to millions of
new customers. To complete this push effect, the company added over 1,000
dealers and now has a total network of 3,500. The next target is to cover the
remaining 15-odd regions (states and union territories) in the next two years .
Ghari now has some 21 units, 15 of which were added since 2006. With the
company now looking to enter more markets, especially in southern India, at
least four more plants are expected to be set up as early as possible.
In 2006, Citigroup Venture Capital India (CVCI) had approached RSPL (then
Kanpur Trading Chemicals) to pick up a roughly 14% stake. The deal didn’t go
through due to valuation differences and RSPL decided to restructure its
business instead. After the restructuring, the company has now almost
doubled its distribution network and production units, all funded through
Around April 2011 onwards, RSPL started using mobile phones to book sales
and track distributor's positions and sales for which it adopted a mobile
application ‘msales’. Msales helped the sales force to take care of the sales
activity on the go and the data captured is pushed to its enterprise resource
planning (ERP) system. Msales is GPS enabled so it is possible to track the
sales. Earlier, it was not possible to track sales on the go.
Promotion:RSPL has attempted to prove that you can be innovative without splurging and
without hiring anyone from the IIMs, either. Ghari spends under 2% of sales on
A&P - as against 12-14% spent by its MNC peers – which helps it sustain its
low margin, high-volume strategy.
All advertisements are centered on the tagline ‘Pehle istemaal karein fir vishwaas
karein’ (Use it and then believe it) which encourages trial and prompts repeat
purchases. Ghari is for common man and usually it targets household wives. To
live in that spirit Ghari has avoided using any celebrity to endorse it unlike
Wheel (endorsed by Salman Khan), Rin (Kajol), and Ariel Oxybin (Kiran Bedi).
They believe that Ghari doesn’t need any celebrity so let consumers use it and
then trust the brand.
Ghari has been very innovative in reaching the customers. With only 35 crores
allotted for marketing and promotional activities, it has used trains for initial
campaigns to promote the product. The first campaign was the Ghari Detergent
Express (a summer special) in 2008 that ran between Lucknow and Guwahati
for 2 months. Its exteriors were painted with Ghari branding. Taking the cue
from there, it then advertised in Pushpak Express that runs between Lucknow
and Mumbai. . Advertisements were also displayed inside the bogies of Swarna
Jayanti Express (from Trivandrum to Hazrat Nizamuddin in Delhi) that cuts
across 3-4 states in south India in 2009. The brand can also be seen on railway
crossings in West Bengal and Uttar Pradesh.
RSPL promotes Ghari at roadside shows, magic shows and exhibitions in smaller
towns and cities. Customers are unlikely to see other brands at these places an innovative idea to break the clutter. The magic shows have given Ghari good
visibility in cities like Jaipur, Indore, Kota, Alwar and Kanpur.
About 30 company-owned vehicles are used for out-of-home advertising.
Ghari detergent provides a profit margin of 9% to its dealers, which is
substantially lower than the standard 12-13% for premium brands, and at the
same time, higher than the 6-7% being offered by the competitors in the same
segment, which is actually quite attractive.
Of late, the company has taken some tentative steps towards the popular media.
Recently, it sponsored a show Rakt Sambandh on NDTV Imagine.
PORTER’S FIVE FORCE MODEL
Rivalry among existing competitors
The major competitors are Wheel and Nirma in the popular
segment and Surf and Tide in the overall market.
Currently, Ghari is the market leader with a market share of
17.3%, Wheel is at number 2 with a share of 16.9% and
Tide is 3rd with a market share of 13.5%. Nirma has
market share of less than 6% now.
HUL gives tough competition in the detergent market as it
has one product for each segment viz. Surf (premium
segment), Rin (mid-scale) and Wheel (popular).
Ghari competes mainly on its affordable pricing, target
market segment, distribution reach (especially to rural
areas), size of its home market UP (which contributes
over 12% to the country’s FMCG sales) and novel,
innovative and effective promotional tactics.
Threat of new entrants
As Ghari is not a very high quality product, entry of
detergents with better quality but affordable pricing can
be a serious threat. Entry is easy as there are low barriers
of entry in the FMCG sector and economies of scale exist
Threat of substitute products
In today’s fast life, even women do not have the time and
patience for manual washing of clothes. This is the age of
highly innovative washing machines. Ghari is a bucket-wash
detergent which can be threatened by sophisticated
detergents meant for effective as well as gentle washing of
clothes in washing machines.
Detergents with properties to protect the hands from
roughness, dryness and allergic reactions in the process of
washing can also be a threat.
Bargaining power of SuppliersSuppliers tend to have a low bargaining power as Ghari is not of a
very superior quality, and the basic ingredients are easily
available since there are numerous suppliers in the market,
switching costs for the raw materials is also not very high.
Bargaining power of buyers
Buyers do possess a strong bargaining power as Ghari is the major
contributor to the turnover of RSPL (it ended fiscal 2011 with
net sales of 2,200 crore — Ghari contributed 2,083 crore), mostly
buyers have full information about the products and market
even in rural areas, products are more or less undifferentiated in
terms of features(major distinguishing factor is the price) and
the switching costs are low(Ghari is priced at 10% premium over
Wheel and Nirma at Rs 35 a kg).
In reference to Ansoff Matrix, a combination of Market Penetration,
Market Development and Product Development Strategies can be
implemented for Ghari Detergent. The following sub-strategies would be
applicable in employing the above-mentioned strategies.
QualityIt is a well-known fact that Ghari is a detergent of mediocre quality. This fact is one
of its drawbacks. Steps should be taken to improve the product quality with an
accommodating investment in order to maintain the price. Following aspects can be
considered:Improving stains effectively with minimum manual effort(since Ghari is
bucket-wash detergent, this aspect plays an important part).
Retaining the actual colors of the clothes
Not causing damage to the fabric
Protection from roughening of hands
The original pack and quality can be maintained for a segment of existing customers who
are fully satisfied with the product. For others, new improved version with improved
quality can be introduced with a differentiating brand name and packaging like Ghari Plus
0r Ghari Advanced.
Variants with different fragrances
Variants with different qualities for different fabrics
PackagingPackaging can be changed or at least improvised.
Reusable jars can be introduced
Plastic bags can be fitted with caps for minimizing over-spilling preventing wastage
Improvisation can be done by using better quality packaging material, better quality
of colors and printing on the packs.
Alternative applicationsUsage of a product can always be enhanced by promoting alternative
applications of the same product. Detergents are made to dissolve oils hence, their
applications can be increased in the following manners:
Safe to use for cleaning sinks, counters, toilets, walls, fireplaces and tubs.
Especially good on greasy areas, such as kitchen floors and stove tops
Cleaning oil or grease spills on garage floor and driveway
Personal selling methodologies can be employed with increased sales force activities
providing them with additional incentives.
Introducing attractive incentives scheme in accordance with the sales volume (for
distributors, retailers, etc.)
AdvertisingGhari has been showing the same kind of advertisements since ages
which lacks novelty and innovation.
Innovative advertisements (preferably showing rural set-ups and people)
should be created highlighting more on its quality, pricing and market share
along with its USP "Pehle istemaal karein fir vishwaas karein".
Genuine customer testimonials can be shown (home-makers from lower and
middle segment households with whom rural people can feel a connection).
Trains used in the promotion of Ghari (Ghari Detergent Express, Pushpak
Express and Swarna Jayanti Express) can be taken through new routes for
more visibility different states(especially rural areas)
South Indian marketThere lies a huge opportunity for Ghari in the southern market but the brand will have to face
competition from regional brands like Power, Challenge, Arasan and Ponvandu which are
medium and low-priced detergents with a rather strong market presence. The competition can
be minimized taking the following measures:
The punch line "pehle istemaal karein fir vishwaas karein" should be highlighted in the
respective regional languages.
The original brand name should be retained which is a strong brand identity for the company
but the original brand name should be used on one side of the packaging along with the regional
name for Ghari on the rear side maintaining the same colors, fonts and logo.
Manufacturing plants in southern region should be set up in order to keep the costs low.
Free samples should be distributed in haats, mandis, fairs, puppet shows, magic shows, etc. to
The advertising trains should be taken to the southern region in major cities and rural towns and
Green marketing“Going Green” is the new mantra in the corporate world. Their protective
measures helps to conserve the environment, gives the members of the
company a sense of satisfaction for giving back to the society and creates
goodwill for the company in the market and society at large. So the
company should make attempts to turn eco-friendly by:-
Introducing bio-degradable ingredients in the product.
Making use of recyclable packaging.
Tour visit to manufacturing plantsA provision should be made for all stakeholders (including
customers) to visit the manufacturing plants and have a tour
visit through the manufacturing process.
Corporate Social Responsibility
The company should indulge in CSR activities like associating with educational
institutions and foundations.
Participating in social issues prevalent in rural India like early marriage, female
foeticide, family planning, etc.