Man who fought with MNCs

To day’s blog is about a simple man, not very highly educated, but with his solo effort he built an Indian brand which competed with established MNC’s brand, and the person is

Karsanbhai Patel

In 1969 he started manufacturing /packaging low cost detergent powder in his back yard, which was after office hour business, at that time he was working with Geology & Mining Dept of State Govt in Ahmedabad. He used to sell his product by cycling in near by area at Rs 3 per Kg, which was at one third price of leading detergents of that time. It became very successful in short time. He gave the detergent a brand name NIRMA, which was the pet name of his daughter. He later quit his job and devoted full time on this business. He then set up his own workshop and retail shop in the suburb of Ahmedabad. Soon brand Nirma became very popular in Gujarat & Maharashtra.

The detergent market at that time was dominated by Multinationals Corporations and leading the market was Surf detergent of Hindustan Lever. Within decade of the launch Nirma became largest selling detergent brand in India. Since production was labour intensive, it became job providers for many. As it did not use much of phosphates , it also became environment friendly. After becoming successful in economic segment , Nirma entered the premium segment in 80s like Nirma Bath & Beauty Soap, Super Nirma detergent.

In the 80s there was a joke in the Market that when Procter & Gamble was about to enter detergent market, Hindustan Lever’s top Executive had  a brain storming session regarding how to tackle P&G onslaught in the detergent Market. They presented their ideas to their Head Quarter in UK, and what reply they got from there was” Program of tackling P&G is OK, but tell us what you are doing to stop Nirma’s Joggernaut”

Presently Nirma has 20% market share in soap cakes and about 35% in detergent market.

In 90s, Karsanbhai started the Nirma Institute of Technology in Ahmedabad, which grew into a leading engineering college in Gujarat. An Institute of Management followed, with the entire structure being consolidated under the Nirma University  of science & Technology in 2003, overseen by the Nirma Education and Research Foundation. The Nirma Labs education project, aimed at training and incubating entrepreneurs, was launched in 2004.

 Success mantra of  Karsanbhai Patel

1. Invest in R & D– Karsanbhai Patel was not a man born with a silver spoon in his mouth and had limited resources. Finishing B.Sc. in Chemistry at the age of 21 and then working as a lab technician, Karsanbhai loved experimenting with chemicals. He realised that only MNCs were selling detergents in India and the country lacked an economy brand detergent. Sensing a huge opportunity, his anxiousness to bridge the gap increased and Karsanbhai started experimenting with chemicals. Soon he was successful in producing a good quality detergent at a much cheaper cost which was an instant hit in the market. The key step to build any successful product is investment of time, money and hard work in research and development.
2. Be Proactive in taking Up responsibilities, which are beneficial for the business-Karsanbhai Patel was the lone personnel producing and selling Nirma. He was educated and had a government job, but never felt ashamed of selling the detergent door-to-door. He was proactive at doing things and realised that the company was small and bootstrapping, so he should accept anything and everything that could be fruitful for his business .No work is too big or too small. Even If you are the CEO, the responsibilities which are beneficial for the business should be accepted without any shame.
3. Provide your customers with ‘Value For Money’-Nirma was an instant hit because customers realised the benefits of buying the product. They found the quality to be at par with the giant brand Surf yet they had to only pay one-third of the price to avail the same benefits. Customers will like your product only if you show them the benefits and provide them with the value for money.
4. Define Your segment-As soon as Karsanbhai Patel discovered the magical formula; he defined the target segment to which his detergent will cater to. He knew that the competitor brand Surf was a premium brand sold in tier 1 cities so he focused on selling his brand in tier 2-3 cities. In order to get more customer traction, he priced his detergent low and made it a mass brand. Soon, people from lower middle class and middle class accepted the product and it captured the market quickly. Where most companies followed the traditional way of top down approach i.e. expanding from metro cities to rural towns; Nirma did the opposite and changed the whole game.
5. Focus on Brand building-In the early 80s, though the product was accepted on a small scale in Ahmedabad, it was struggling to find sellers outside the city. Retailers were skeptical of keeping the detergent in their stores since customers were unaware of its existence. It resulted in delayed payments, inventory return and high losses to the company. To tackle the situation, Karsanbhai Patel came up with a strong promotional strategy and launched an advertising campaign on TV. The famous jingle “Washing powder Nirma, detergenttikiya Nirma” became an anthem for the company and consumers started associating Nirma as a powerful brand. Soon the demand for Nirma peaked, and Patel flooded the retail stores with his products.
6. Diversify Portfolio-Nirma started with a low cost detergent for low income groups, but later launched products like Nirma Sandal soap, Nirma Beauty soap etc. for the higher income groups .Not only this, Karsanbhai Patel also founded Nirma University in year 2003, in order to diversify the brand portfolio.. Diversifying the portfolio not only reduces the overall risk of failure of the company but also helps the company to cater to varied segments.

In the end HATS OFF to this simple man.

Awaiting your views/comments/feed backs on this post.

Anil Malik

Mumbai, India

18th Dec 2018