- Rs 3 per kg: launch price of Nirma detergent
Like any entrepreneurial genius, what Karsanbhai Patel did was to spot an unmet need—and he came up with a product that changed the way Indians do their laundry. It’s not necessarily a management degree that makes such stories, but insights gleaned from lived experience. As things stood, only a sliver of the Indian middle-class was used to buying detergent powder. Surf was the market leader, but it wasn’t everyone’s idea of how to wash clothes. For the majority, the traditional way was to scrub away with a rugged soda, fragrance-free soap that was harsh on skin.
Patel came up with Nirma (named after a daughter who had died in an accident) and proceeded to create a market where none existed. Launched in 1984, Nirma took no time to become a household icon—helped along by an ad that became a jingle hit, the little girl swirling in a squeaky-clean frock herself a pop symbol of the ’80s now. Patel was a homegrown price-war marketing wizard. His product cost almost 25 per cent less than the nearest competitor, with a reasonably decent quality to boot. Two elementary virtues, and a good slice of the market was his. Nirma surged past the behemoth Hindustan Unilever and, for the better part of the ’80s, stayed ahead.
Patel’s business instincts, albeit self-taught, were deep. Take his strategy of total product integration. Nirma produced the entire chain of ingredients that went into the main product. By the mid-’90s, Nirma entered the cosmetic soap segment, where too it blazed a trail. It couldn’t beat Hindustan Unilever in this category but ended on the podium as the second largest entity on the market, ahead of Godrej.
Through all of Nirma’s crisis points, it was Patel’s brilliance that saved the day. Once when cash realisation from retailers dipped suddenly, Patel did something that shocked the market into working for him again. He withdrew over 90 per cent of his stocks from the markets. The ads, however, played on—working up serious lather at the consumer demand end. This brought cartelising retailers to their knees. Patel has handed over his reins to his sons, but his imprint now extends to Nirma University. A Padma Shri, Patel is an original Indian business hero.