Nirama Shadhu Salt Grand Project Report

8/2/2019 Nirama Shadhu Salt Grand Project Report

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A

GRAND PROJECT REPORT

ON

Study of Criteria for the Purchase of Edible Salt with special

reference to Nirma Shudh Salt"A grand Project report submitted in Partial Fulfillment of award of PGDM Degree

PROJECT GUIDE:

PROF. ANIRUDH TAMBE

SUBMITTED BY:

YATIN ROKAD

PRINCE DUDHATRA

SUBMITTED TO:

Post Graduate Diploma in Management

(Two Year Full Time Residential Programme Recognized by

AICTE, MHRD, New Delhi)

PARUL INSTITUTE OF MANAGEMENT

VADODARA


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AcknowledgementMotivation and co-operation are the main two pillars on which the success of any works relies. So

first of all I would like to thank my project guide Prof. ANIRUDH TAMBE (faculty of Marketing

Manageent) who made me aware about the project and motivated me to work on the guideline of this

unique, new and knowledge based project. He had guided me at each and every stage of the project. And

enthusiastically involve in every aspects of the project. Overall I am highly indebted to him for all theknowledge, guidance and motivation that he has provided me throughout my project.

Every person wants to prove himself in this fast, dynamic and cut-throat competitive world.

When he/she gets an opportunity to do so then he or she will find that success is very near to him/her. So

I would like to acknowledge my beloved Director Prof. Sameer Rohadiya who provides lots of motivation

to got best way to present myself.

I would like thankful to Prof. Ashiya Shekh, Prof. Kinjal Palvankar, Prof.Sachin, and Prof.Ashish

Bhatt for providing all the necessary support from their side. Without their continuous guidance and

support, it would have been difficult for me to complete the project on time and in such a successfulmanner.

Lastly I would like to thank my parents, friends and well wishers who encouraged me to do this

research work and all those who contributed directly or indirectly in completing this project to whom I am

obligated to.

Thank you all


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Declaration

We undersigned Dudhatra Prince B and Rokad Yatin T. Students of PGDM, hereby declare

that the project work presented in this report is our own work and has been carried out under the guidance

and supervision ofProf. Anirudh Tambe of Parul Institute of Management, Baroda.

This report has not been previously submitted to any other college or institution for any other

purpose.


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Executive Summary


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I N D E X

NO Content Page No.

1 RESEARCH METHODOLOGY

2 INTRODUCTION TO THE SALT INDUSTRY

3EDIBLE IODISED SALT

4PEST ANALYSIS OF INDUSTRY

5FIVE FORCES ANALYSIS OF INDUSTRY

6COMPETITIVE ANALYSIS

7PROMOTIONAL CAMPAIGN IN EDIBLE SALT INDUSTRY

8NIRMA INDUSTRIES LIMITED

9SWOT ANALYSIS OF NIRMA SHUDH SALT

10 DATTA ANALYSIS

11HYPOTHESIS

12FINDINGS

13 SUGGESTIONS & RECOMMONDATIONS

14 BIBLIOGRAPHY

15 APPENDIX

16 LIST OF THE GRAPHS


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LIST OF THE GRAPHS

No Content Page NO

1 USER OF THE IODISED SALT

2 USERS IN AHMEDABAD

3 DIFFERENT BRANDS OF SALT TO AREA

4 RANKING PREFERENCE

5 AVERAGE MEAN

6 USERS OF SAME SALT BRAND

7 FREQUENCY OF PURCHASE

8 NUMBER OF 1 KG PACKETS REQUIRED FOR 1 MONTH

9 PURCHASE DECISION MAKER FROM WHERE YOU

10 PURCHASE SALT USER OF NIRMA SHUDH SALT

11 RANKING PREFERENCE FOR NIRMA SHUDH SALT

12 PRICE OF NIRM SHUDH SALT

13 INFLUENCER OF PURCHASING NIRMA SHUDH SALT

14 MEDIA USED

15 HAD RESPONDENTS SEEN TELEVISIONADVERTISEMENT?

16 AVAILABILITY DIFFICULTY

17 DO YOU LIKE PACKAGING


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RESEARCH METHODOLOGY

Research Methodology is a systematic design, collection of data, reporting of data and findings

relevant to specific marketing situation that is faced by company with the paradigm in the market shifting,

from the product to consumer, their needs and preferences have become essential to the considered by

the producer today in the world of cut throat competition to be ahead in the race and to lead is required to

reach consumer first.

The NIRMA SHUDH SALT, which has newly relaunched in India. The sale of Nirma Shudh Salt

is not increasing rapidly that is the problem. Therefore, research problem is to identify the consumer

preference of edible (iodized) salt as well as the satisfaction level of consumer regarding the Nirma Shudh

Salt and what are the problems they are facing regarding the product.


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OBJECTIVE OF THE STUDY

To study the Consumer Preference for Edible Salt

To study the Consumer Preference for Nirma Shudh Salt

To study the awareness about Nirma Shudh Salt

To know the brand awareness of Edible salt in different area of Ahmadabad and to illicit theConsumer opinion about pr ice, quality, reasons for choice, brand satisfaction etc.

To study the purchasing pattern of Edible Salt.

To know the criteria preferred by the consumer at the time o f purchase of edible salt


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RESEARCH DESIGN

A research design is the specification o f methods that producer wants to acquire from the market.

It is the overall operational patterned framework of the project that stipulates what information is to be

collected and fro m which sources and from which producer of this competitive environment. Generally,

there are basic three types of research design, Exploratory, descriptive and Casual research. HereResearcher has taken Descriptive Research Design and the reason behind it is as follows: TheDescriptive Research Design is used when the researcher is interested in knowing the characteristics of

certain group. Here Researcher is interested in knowing the proportion of people in a given population

have behaved in a particular manner making projection of things o r deter mines the relationship between

two or mo re variables. The objective of the study will answer who, what, when, where, and how of thesubject under investigation for consumers as well as retailers. It is therefore necessary that Researcher

will give sufficient thought for framing research questions and deciding the type of data to be collected.

DATA COLLECTION METHOD

1. PRIMARY DATA:

Using two methods, the data has been collected:

Observation:

The purpose of observation was to have a look o n the actual conditions of which brand of salt are

used byconsumer. With the help o f Retailers, Researcher has seen the consumers observation as actually,how much and which brand of salt they are using at present? What is the purchasing pattern o f consumer?

Questionnaire method:

The questionnaire is divided into two methods that is Structured and Non-structured Questionnaire

Method. Researchers have used the Structured-No n- Disguised Questionnaire that is the part of a

Structured Questionnaire. In that Method, the listing of question is a pre-arranged order and object inquiryis revealed to the respondent. Researchers have done the pilot survey of 20 customers for checking outvalidity of our questionnaire and then Researcher has finalized our questionnaire for the survey purpose.


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2. SECONDARY DATA:

Someone already collects these data and it is available fo r my present study. And the sources of the

data are as follows:

Internal sources:Annual Report of NIRMA.

External sources: Magazine Newspaper Library books Web Sites Population List

SAM PLING PROCESS

Defining the population:

It is the aggregate of all the elements defined prior to the selection of the sample. It is necessary to

define population in terms o f Element, Sampling extent and time. I have conducted a survey on theconsumer toknow the preference and satisfaction level for Edible Salt user s (especially Nirma Shudh salt)withspecial reference to different areas of Ahmadabad. These specifications are as follows:

Element: Buyer of Edible Salt. Sampling Size: 250 Ho use Hold Sampling unit: Household respondents Sampling method: Stratified Convenient Sampling Sample size decision:

For using the stratified sampling method, I have divided the city according to the Zone wise. And

The Ahmadabad city is covered with many areas which are representative of the Ahmadabad as a Whole.I have chosen areas like Maninagar, Satellite, Vadaj, Saraspur, Meghaninagar, and Bapunagarand Naroda.


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Hypothesis:

A chi- square test for independence has been conducted for knowing the relation between the area and

the

Preference to wards salts.

Ho: Preference to wards salts and area are independent of each other.

H1: Preference to wards salts and area are dependent of each other.

LIMITATIONS OF THE STUDY

The limitations o f the study carried out are as follow:

This study is limited to different areas of Ahmadabad I have considered the survey with only 250 households for knowing about consumer

preference about the Edible Salt in Ahmadabad.

The accuracy o f the project and conclusion is totally dependent on the data collected andanalyzed.

The sample size is too small to predict the future growth of the edible salt industry.


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SALT INDUSTRY

Introduction

India is the third largest salt producing country in the world (after the US and China) with anaverage annual production of about 148 lakh tones. In a very short period of time sufficiency was

achieved (in 1953) and made a dent the export market. Since then, the country has never resorted to

imports. Exports touched an all time high of 1.6 million in the year 2001.

The per-capita consumption of salt in the country is estimated at about 12 kg, which includes edible

as well as industrial salt. The current annual requirement of salt in the country is estimated to be 60 lakhs

tones for industrial use. Caustic soda, soda ash, chlorine etc., are the major salt-based industries.

Besides about 15 lakhs tones o f salt is exported every year. Sea salt constitutes about 70% o f the

total salt production in the country. Salt manufacturing activities are carried out in the coastal states of

Gujarat,TamilNadu, Andhra Pradesh, Maharashtra, Karnataka, Orissa, West Bengal Goa and hinter landState of Rajasthan. Among these States only Gujarat, Tamil Nadu and Rajasthan produces salt surplus to

their requirement. These three states produce about 70%, 15% and 12% respectively o f the total salt

produced in the country and cater to the requirement of all the salt deficit and non-salt producing states.

Private sector plays a dominant role contributing over 95% of the salt production, while the public

sector contributes about 2-3%. The co -operative sector contributes about 8% whereas the small- scale

sector (less than 10 acres) accounts for nearly 40% of the total salt production in the country.

Salt Production

There are about 10107 salt works, mostly in small sector engaged in the production of salt. The

total area under salt production is about 5.0 lakes acres. The salt manufacturing activities provide direct

employment to about one-lake persons per day.

Distribution of Salt

Railways play an important role in transporting salt from three surplus states to the entire length

and breadth of the country. On an average, 55% of edible salt is transported by rail from productioncenters. The remaining quantity moves by road and waterway.


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Iodized Salt

With a view to ensure universal access of iodized salt for the prevention and control of goiter and

other iodine deficiency disorders in the country, Salt Commissioner's Office has been identified as the

nodal agency for creation of adequate salt iodization capacity, its distribution and quality monitoring at

production centers, under NIDDCP. Salt Department has granted permission to more than 878 saltiodization units with an annual

Installed capacity of 112 lakh tones so far.

Exports

Export of common salt and iodized salt is permitted under Open General License (O.G.L.). Salt is

exported manly to Japan, Philippines, Indonesia, Malaysia, Nepal, and Bhutan etc. India has, for the first

time, exported 32,500 tons of common salt to the US during December 2002, creating a history of sorts.

Liberalization and Simplification of Procedure

Following amendments to Central Excise and Salt Act, 1944 in 1996, de-licensing the salt industry

and salt Cess Rules, 1964 in 2001 and introducing self-removal procedure (SRP) instead of permit system

for payment of cess and removal of salt from salt factories, several registers have been discontinued or

reorganized.

When the Father of the Nation, Mahatma Gandhi strode purposefully alongside thousands across

the length of Gujarat in his historic Dandi March in 1930 to release the domestic salt industry from the

shackles of the Britishers, little did he anticipate that half a century later the same salt industry -- at that

time a mere 20 lakh tones of salt was being produced and salt was being imported to meet the domestic

demands -- would end up as a Rs 3,600 crore industry accounting for the world's third largest production,

averaging a whopping 14 million tones annually. Salt production encompasses an estimated area of over

4.8 lakh acres spanning the states of Gujarat, Rajasthan, Tamil Nadu and to a lesser extent, Andhra

Pradesh, Tamil Nadu, Orissa and West Bengal. The industry directly employs over one lakh salt laborers.

Salt is an essential commodity with inelastic demand. Planning of production targets, distribution

of salt and price surveillance, promotion of technological development, maintenance of standards,

improvement of quality of salt and promotion of exports are done by the office of the Salt Commissioner,

Jaipur, India. Per capita consumption of salt in the country is estimated at about 12 kg. Per head perannum, which includes edible and industrial salt. Current annual requirement of salt in the country is

estimated at 60 lakh tones for edible purposes (including animal consumption) and 60 lakh tones for

industrial use.


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Caustic Soda, Soda Ash, Chlorine, etc. are the major salt-based industries. The country is not only

self reliant in salt production but also exports about 10 lakh tones of salt annually over the past few years.

Salt is manufactured mainly by solar evaporation of seawater, sub-soil and lake brine. Sea salt constitutes

about 70% of the total salt production in the country. Salt manufacturing activity is confined mainly to the

coastal States of Gujarat, Tamilnadu, Maharashtra, Karnataka, Goa, Andhra Pradesh, Orissa, West Bengal

and in the Hinterland State of Rajasthan. Gujarat, Tamilnadu and Rajasthan are surplus in salt production,producing about 72%, 14% and 11% respectively of the total salt production of the country and cater to

the requirements of deficient and non-salt producing States.

Salt works having an area of more than 10 Acres (including salt works set up by the co-operative

societies) are covered under the provisions of the Salt Cess Act, 1953. Salt works having an area up to 10

Acres set up by individuals or groups of individuals are exempted from the provisions of the Act. The

private sector plays a dominant role in the salt industry, contributing over 95% of the total salt production,

while the public sector contributes about 3-4%. The small sector (less than 10 acres) accounts for about

30% of the total salt production in the country. There are also units in the co-operative sector. The salt

manufacturing season begins with the closure of monsoons i.e., by the 15th October and lasts up to June

next year coinciding with the onset of monsoon again.

COMMON SALTPROPERTIES AND USES

Sodium chloride (Nacl) now called common salt is an example of the simplest type of chemical

salt. a molecule of common salt contains an atom of chlorine combined with 23 parts by weight of sodium

to form 58.5 parts of common salt., Rock salt is rarely found in an absolutely pure anhydrous state in

which it is colorless and perfectly transparent. In most rock salt, mines such specimens are considered

curiosities. In Wieliczka mine in Poland and in Khewra mine in the Punjab large masses of salt containingover 99 percent Nacl are met with. In the Punjab mines we meet with salt of different colours such as

white, pink, darkish or red. The colour disappears when salt is crushed to powder. The colour of seawater

is affected by the percentage of salt in it; as the quantity of salt decreases, the colour changes from blue to

green. Salt is met with in any colours; white, pink, red, brown, greenish and grey. The red or green colour

is attributed to the presence of infusorians.

Salt is highly soluble in water, 100 parts of which dissolve 37 parts of salt. The specific gravity of

such solution 1:2, the specific gravity of salt crystals is 2.16. The smallest quantity perceptible to taste is

68 grains of salt dissolved in a gallon of water. Pure Sodium Chloride is not deliquescent. It, however,

absorbs moisture owing to the presence of magnesium chloride. Sodium Chloride melts at very high.

temperature, at still higher temperatures it evaporates and at white heat it volatilizes forming thick clouds.

It does not diffuse much, even when masses of varying densities are super-imposed on one another.


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Salt is fairly hard. There is no standard unit fixed for hardness. Geologists, however, compare the

hardness of minerals by a comparative table (Mohs table of hardness) according to which the hardness of

talc is considered as one and that of diamond ten. According to this standard the hardness of salt is 2.5. Its

cohesion or power of supporting pressure is twice as great as that of bricks. Common salt is a crystalline

substance: crystals generally form cubes and sometimes they form octahedrons. The form of crystals

depends on temperature, state of rest or motion, length of time etc. Salt has a perfect cleavage. It splits upreadily in to planes parallel to the faces of the cubes of which it is composed.

Salt has acoustic properties as well that is to say; it is a good medium for the transmission of

sound. Workmen in a salt mine are able to signal by blows on the face of the rock. Salt possesses in a high

degree the power of staying decomposition in dead organisms and is the commonest of all preservatives.

Owing to this property it is an absolute necessity to the life of man and the higher animals. Salt water

trickling through the roof of a working also forms stalactites and stalagmites just as time-stone forms

them. In Khewra mine we meet with long hollow tubes of salt formed by the brine trickling drop by drop

through the roof.

Rock salt has many minerals associates with it: for instance, gypsum, sodium sulphate,

magnesium sulphate and magnesium chloride. In the Khewra mine, salt is found mixed with variously

cioloured clays, white pink, red, variegated gypsum beds, limestone, and magnesium sulphate. Bad salt is

associated with magnesium sulphate and good salt with calcium chloride. A cube foot of pure rock salt

weight about 25 to 27 kgs.

Common salt is a necessity of life. It imparts an agreeable flavor and improves the taste of food

and is used as a condiment. it may be interesting to know how exactly salt consumed in its natural or

artificial form functions in the human body. It is Iodized by infusion of minute doses of potassium iodide

about .02% as prophylaxis for Goitre Similarly, it is medicated with phosphates or other ingredients toregulate the deficiencies in human system. Salt, in short, is a preserver health. Lord Lawrence, in his

evidence before the Select Committee on East India Finance in 1873, attributed the prevalence of murrain

in the Indian cattle to the want of salt in their food. It was used as chemical manure long before the

Christian era and its value was recognized throughout Europe. the ancient Hebrews applied it as a manure

over 2,000 years ago in Palestine and so did that eminently agricultural people in Chinese and do still to

this day. The old Romans too used it as manure. In India its use in agriculture is rather looked on with.

disfavor. Mr. Arthur Young, an outstanding figure in the history of English and even European

agricultural renaissance, considered salt of great value as fertilizer.

The use of salt in modern industries is equally or perhaps more important. A number of arts and

manufacturers of modern civilizations owe their existences to salt. In short, salt is indispensable to

industrial advance.


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PRODUCTION

Scanty rains and draught like conditions in major salt producing States of Gujarat and Rajasthan

resulted in prolonged salt manufacturing season and thereby creating conditions for increases in salt

production after 2000.

With the increasing thrust on ionization of salt and to meet the quality needs of the industrial

sector, emphasis is being laid on the manufacture of quality salt. Up gradation in quality of the raw salt

manufactured from the solar salt works to cater the above requirement is undertaken in salt washeries

and refineries. Salt Department has registered 39 salt washeries/refineries so far, of which, 31 units have

commenced commercial production.

The country is also focusing on the export of the salt as the production is increased beyond the

consumption level of the Indian market.

DISTRIBUTION

Railways play an important role in the movement of salt from the three surplus salt producing

states to the far-flung areas of the country. About 66% salt dispatches from the production sources are

by rail the remaining by road and waterways. The Zonal Scheme formulated by the Salt Department in

consultation with the Railways and the state Governments ensures adequate supply to the consuming

areas. During the year 2001-02, no scarcity or abnormal price rise was reported in any part of the

country. The companies, which are prevailing in the edible salt market, have the advantage of effective

distribution network because it is one of the factors of making a success in the market.

LIBERALISATION & SIMPLIFICATION OF PROCEDURE

Cess on Salt is levied as per provisions of the Salt Cess Act, 1953, and the Rules made there

under. With a view to further liberalize and facilitate realization of salt cess from the salt manufacturers

(erstwhile licensees), the Government has introduced Self Removal Procedure (SRP) in place of

consignment-wise permits system for removal of salt from the Salt Factories vide Notification dated 4th

September, 2001. The concessions provided in the rate of Cess in the Salt Cess Rules, 1964 and

subsequent amendment made vide Ministry of Industrys Notification dated 09.09.1981 still continue to

be in force.


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EXPORTS

Despite being among the largest producers of salt in the world, India has not been able to make a

dent in the international markets which is evident from the low volumes; our best export performance thus

far has been a miniscule 6.66 lakh tones in 1990.

The Indian salt industry has been singularly unsuccessful on the export front, despite India's salt

probably being the cheapest in FOB terms compared to other salt exporting countries. This is mainly due

to the high trade logistic cost which leads to interminable delays in the turnaround of vessels, which

pushes up the CIF value of Indian salt to unacceptably high levels. The inability of India to have a global

presence is also one of the main reasons for the prevailing glut conditions in the Indian market. Since the

scope of increasing demand in the domestic market is fairly limited, the only way to come out of the glut

crisis is by emphasizing on exports in a big way. Alarm bells are already ringing in the industry over the

record 14.5 lakh tone salt production in 1998-99, which is expected to burgeon to around 16-18 million

tones in the current year.

While a mere two per cent of the country's salt is manufactured by the 11 public sector and joint

sector undertakings -- Hindustan Salt Works (Kharaghoda and Mandi), Experimental Salt Farm

(Bhavnagar), the Tamil Nadu Salt Corporation and SmbharSalts-- a whopping 98 per cent is in the

hands of the private, co-operative and unorganized sector. But here again, the big corporate have a low

presence with the lion's share with the small and medium units.

According to the salt department statistics, in 1998-99 there were 2,752 recognized salt units as

against an estimated 6,408 unrecognized units in the country. The recognized salt manufacturers allege

that these unrecognized units not only supply sub-standard salt in the market but are also causing major

revenue losses to the government by evading cess and royalty payments.

India produces more salt than its domestic requirements. These apart, the industry is also finding it

difficult to keep its head above water on account of the drastic slump in demand for industrial salt by the

recession-hit domestic soda ash and caustic soda industries which are the main salt consumers.

Export of common salt and iodized salt is permitted under Open General License (O.G.L.) Salt is

exported mainly to Japan, Philippines, Indonesia, Malaysia, Nepal and Bhutan, etc


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Every day, each of the earth's 5.9 billion inhabitants uses salt. Annual salt production has increased

over the past century from 10 million tons to over 200 million tons today. Nearly 100 nations have salt

producing facilities ranging from primitive solar evaporation to advanced, multi-stage evaporation in salt

refineries.

Humans need salt to live. Prehistoric man obtained salt from the meat of hunted animals. When man

developed agriculture, salt was added to supplement the vegetable and cereal diet and the quest for salt

became a primary motivation in history. In the mid-1800s, salt's value as an important raw material for the

chemical industry was established when the Solvay process in Belgium converted salt to synthetic soda ash.

Salt is, today, the largest mineral feedstock consumed by the world chemical industry.

IODIZED SALT

With a view to ensuring Universal Access of iodized salt to eliminate goiter and other Iodine

Deficiency Disorders in the Country, the Salt Commissioners Office has been declared as the Nodal

Agency for the creation of adequate capacity for the production, distribution and quality monitoring of

iodized salt at the production centers under the National Iodine Deficiency Control Programmed (NIDDCP).

The Salt Department has registered more than 940 units with annual installed capacity of 147 lakh tones.


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EDIBLE IODIZED SALT

INTRODUCTION

The scenario on the edible salt front is not so grim thanks to India's burgeoning population. To some

extent, decrease in demand for industrial salt is being nullified by the increase in demand for edible salt. Anindividual's annual requirement for salt has been pegged at 6 kg. Taking the country's present population at

100 crores, the requirement for edible salt would be 60 lakh tones per annum. Despite a burgeoning

population and the corresponding increase in the demand for edible salt, it is clear that on the industrial salt

front, the industry has heavy odds stacked against it. As an industry observer sums up, What we need is not

only large markets within the country only but outside too. And for this, the country requires standardization

of quality and concentration of supplies instead of the present scattered quantities available with the small

manufacturers. And an influx of technology as well. The sooner this is done, the better it is for the health of

the industry.

Competition is hotting up in the branded salt market with Tata Salt, the blockbuster brand of Tata

Chemicals Ltd, emerging as the market leader. Tata Salt has a market share of around 37 per cent while its

closest competitor, Annapurna from Hindustan Unilever Ltd., is breathing down its neck with a market share

of around 35 per cent, a recent ORG-MARG retail audit revealed. The ORG-MARG retail audit showed that

the 15 lakh tones domestic branded salt market would witness stiff competition among popular brands such

as Dandi, Surya and Nature Fresh as they try to grab a comfortable share, each with intensive marketing

strategies and advertisement campaigns. The ORG-MARG figures revealed that during the financial year

ended March 31, 2002, on an average basis, Tata Salt grabbed a market share of 36.58 per cent, while

Annapurnasmarket share touched 34.46 per cent. DCW Home Products Ltds Captain Cook (now with

HLL) had 7.78 per cent market share and other brands such as Dandi, Nirma Shudh andNatural Fresh hadmarket shares of 0.97 per cent, 1.37 per cent and 0.14 per cent respectively. In March 2002, the market share

of Tata Salt touched 39 per cent, while Annapurnasmarket share during the same period was around 30 per

cent. According to analysts tracking the industry, the recent entrant to the branded salt category is Dandi

salt. The brand is being advertised heavily on the regional channels and it has managed to gain around 0.97

share of the branded salt market. However, they said that the unbranded sector continues to control a

sizeable share of the overall salt market in the country. Meanwhile, sources said that Tata Chemicals has

already initiated new efforts to involve and engage its business associates in marketing and strategy

processes to enhance the brand muscle of Tata Salt.

While Captain Cookis positioned on the basis of its unique selling point, the free-flowing nature of

its salt, Tata Salt is positioned on the purity platform and Annapurna is positioned on the health benefit

impact of the iodine content in the salt." Tata Salt, the first branded salt in the country, was launched in

1983, DCW launched its brand in 1991 and Hindustan Levers Annapurna was launched in 1996. Other

FMCG companies such as Dabur India and Marico Industries have also got a presence in the salt market,

though insignificant, with their brands Nutra salt, a low sodium salt and Safola Salt, which is a mineral

enriched low sodium salt respectively. Both the above brands are positioned on the health platform and are

priced at a significant premium to the normal salt brands.


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EDIBLE SALT IS BETTER IN COMMODITY MARKET

The trend of commodity-to-brand is yet to gain pace. While performance of staple foods has been

patchy and has fallen short of expectations, one market that's remained on top of the heap and growing faster

is branded salt. Well, if there's one commoditised brand that has been outperforming others such as atta,

sugar, rice and staples, it is good old salt. Salt, sugar, atta - all are commodities but at very different stages

of evolution with different brand building drivers. And while the three segments are not entirely comparable

as products, in evolutionary terms, salt is ahead.

Take FMCG giant HLL. It was some four years ago that HLL, based on recommendations by

McKinsey's Food & Agriculture Integrated Development Action (FAIDA) buoyant report on the foods

industry, had decided to push mass consumed staples such as Atta, salt and rice. HLL's projections - of a

million tones by year 2000-0 1 - have since fallen short with current volumes of salt and atta adding up to

less than half-a-million tones. While rice has been pulled back and Atta has seen a fall in market share this

year, the eight-year-old Annapurna salt is not only doing well, but is profitable at that. According to ORG-

MARG's retail store audit data for April 2002, the size of the iodized branded salt market is estimated at 15

lakh tones per annum (by value, about Rs 500 crore), and is estimated to be growing at 20 per cent annually.National brands take a 45 per cent share, and local brands account for the remaining 55 per cent share of this

market. Compare this with other branded commodities - while branded, packaged sugar is estimated to be a

40,000-tonne market, industry estimates peg the size of the domestic branded wheat market at roughly 1.8

lakh tones. Tata Salt continues to reap the early bird advantage, with a leading 39 per cent share of the

national branded salt segment, and a 17 per cent share of the total iodized branded salt market. HLL's

Annapurna salt brand is estimated to have a market share of about 16 per cent. (DCW Chemicals' Captain

Cook, launched in 1991, was subsequently acquired by International Best foods, which in turn was acquired

by Unilever.) HLL continues to distribute Captain Cook salt, but the brand isn't being pushed as

aggressively. New entrant Nature fresh, from the Cargill Foods stable, claims to be showing positive results.

"Nature fresh salt, introduced in December last year, has been able to make inroads, generating switch in

brand preference from the top end of the edible salt market. Other significant branded players include

Marico's Saffola, positioned as a niche, low-sodium brand introduced about four years ago, and Nirma

Shudh, which isn't completely national yet. Meanwhile, another ambitious entrant that's making waves

within the branded salt category is Dandi, launched last October by Surat-based businessman Suresh

Aggarwal. The brand is threatening to shake up market shares of established players in the category. Dandi

has already grabbed a four per cent share of the market, which amounts to Rs 44 crore by value. The

marketing mix for Dandi has been bang on - attacking tea through a grassroots level Rs 8-crore ad campaign

which gave the brand instant recognition, ensuring retail push, and cross-selling (giving away a saree free

with purchase of Dandi salt - the Kunvar Ajay saree brand is owned by the same group). In addition tokitchen salt, one segment that has remained the stronghold of the Delhi-based Rs 700-crore DS Group is that

of table salt. The table salt market is limited - estimated at Rs 25 crore - and dominated almost entirely by

DS Foods' Catch brand. Catch, introduced in 1987, is available in 16 different products (including spices and

variants such as pepper and black salt) in 100 gm tabletop dispensers, and has its production base in Noida.

Catch free-flowing table salt's performance is satisfactory, but there are no plans to extend it to kitchen salt.

The brand occupies a niche and is doing well for itself. Table salt, for example, has less than one per cent

impurity compared to 30-40 per cent impurities in kitchen salt. Even the best quality kitchen salt would be

having an impurity level of 15-20 per cent.


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So why is salt on stable turf while performance of other branded commodities has been, by and large,

patchy and below expectations? One of the reasons why salt is outperforming other branded commodities is

to do with the life span of branded salt being longer. Apart from that, there's been an effective ìodine

deficiency campaign', owing to which the penetration of branded salt is about 20 per cent nationally,

compared to one per cent for branded atta and sugar. While salt has been branded for some two decades

now, it is in recent times that the branded salt market has witnessed the entry of several players. The trend of

branded atta is only a three-four year old phenomenon, and unlike salt and sugar, branded atta has very

limited shelf life and freshness is crucial to end product quality. Besides, significant laddering benefits of

branded atta haven't yet evolved. As for branded sugar, the story is just beginning, with brands like

Dhampure coming up and Amul planning to enter the category.

But what about brand loyalty? Do differentiators such as `free flowing', ìodized', `granular' and

`vacuum evaporation' actually influence brand purchases when salt remains a low-value, low-involvement

product with few differentiators of significance? While the consumer is swayed by a number of brands and

benefits, which indicates low brand loyalty, there is a preference for reputed brands and familiar names.

That's because salt is a habitual product and the consumer doesn't prefer frequent brand switches. The Indian

consumer is willing to switch among a set of preferred brands, depending on availability, personal

preference and product offering. Once a consumer gets a certain branded salt free with another purchase, the

housewives may just continue with the brand. Of course, distribution muscle is key. Tata Salt penetratessemi-urban and rural markets through economy pack sizes and forms and product development for newer,

more èvolved' offerings. And Dandi already reaches 1,000 towns, piggybacking on 1,150 distributors.

So where is the much-talked-about commodity to brand movement headed for? "It will happen and at

a much faster pace now than before, due to the consumer's consistent quality demands and improving supply

chain of produce from farms." "The commodity market will progressively move into the branded portfolioas long as the `value delivery' is in line with the product price. Margins will continue to be thin till the

consumer's perception of the differentiated values that brands offer over commodities changes significantly.


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P E S T A N A L Y S I S O F I N D U S T R Y

Whichever the industry is, the political, economical, social & technological environment plays an

important role. These factors are the factors, which will influence the industry as a whole that means any

company cannot ignore the PEST for their further development. Following are some of the factors that are

influencing the edible salt industry.

POLITICAL/LEGAL FACTORS

Government has imposed a ban on non-iodized salt that means more market for the iodized salt inthe edible salt segment.

It is when a legion of 70 million goiter-affected people stand as a pointer to the magnitude of iodinedeficiency in the country that the Center has made a move to withdraw restriction on sale of common

edible salt.

Though de-licensed in 1996, the government retains a modicum of control over the industry. Itcontrols leasing of all Central Government land for salt manufacture along with planning the

production targets.

The Government has adopted the Universal Salt Ionization Programme under the aegis of the WorldHealth Organization.

The Central Government also supervises equitable distribution, monitors quality and prices, ensuresmaintenance of standards and improvements quality and promotes technological developments along

with training of personnel. The salt department is under the purview of the industry ministry and is

responsible for collecting the salt cess, assignment fees, ground rent and other dues.

On the welfare front, the government acts as a nodal agency for planning, formulating andmonitoring development and the labour welfare schemes. And if the issue is one of loss ofemployment of some small-scale producers of salt, the solution is formation of salt co-operatives,

which should be given free equipment and other facilities for salt ionization.

As Gujarat is the main producer of Salt, the Government of Gujarat has exempted the Salt industryform VAT that will be implemented from 1st of May.

The Centers recent decision to impose anti-dumping duties on soda ash imports from China hasbeen hailed widely by the salt industry. It is felt that the results of this measure will soon be visible in

the healthier balance sheets of both the salt manufacturers and the soda ash and caustic soda

industries.


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ECONOMICAL FACTOR

The U.S. is the world's largest salt producer as well as the largest consumer. The U.S. salt industryearns more than $1 billion a year. The second-largest producer is China, then Germany, Canada,

and India.

Only 17 per cent of the iodized salt produced in India is of the refined category, which means thatthe remaining 83 per cent salt is being produced by medium and small manufacturers.

Under normal conditions, of the average salt production (13.5 to 14 million tones), around 4.5 to 5million tones is consumed for edible purposes while, 5 to 5.5 million is utilized for industrial

purposes. Industrial salt is also used extensively in the chemical industry for the manufacture of

plastics, glass, chlorine, soap, textiles, paints, rubber, paper and caustic soda for aluminum

production.

The annual increase in overall demand for the commodity is pegged at a healthy 10 per cent and by2005; the total demand for salt is expected to increase by 40 to 50 per cent.

Branded salt accounts for 20 per cent of a five million-tone market, say some industry analysts.Valued at Rs 500 crore, the market is growing at 20 per cent per annum. Tata Salt leads the marketwith around 30 per cent market share followed by Hindustan Lever's Annapurna and DCW's

Captain Cook at around 15 per cent.

Nirma Shudh salt, Surya salt, Saffola salt, Nature Fresh salt, Nutra salt and unorganized salt firmare the major threats to the market leader.

SOCIOCULTURAL FACTORS

Iodine deficiency is the single most important cause of preventable brain damage and mentalretardation, most of the damage occurring before birth. It also significantly raises the risk ofstillbirth and miscarriage for pregnant women. The successful global campaign to iodize all edible

salt is reducing the risk associated with this deficiency, which threatened 1.6 billion people as

recently as 1992. Nevertheless, it is estimated that 43 million people worldwide are suffering from

varying degrees of brain damage; there are an estimated 11 million overt cretins. Some 760 million

people have goiters.

The Tata Chemicals has also some social responsibility and brand commitment and to this end haslaunched the Desh Ko Arpan programme where 10 paise on each pack of Tata Salt sold in a

month would go to CRY.

The salt is being consumed by richest to the rich and poorest to the poor, so the Governmentmaintains the affordability of the price.

Nirma Shudh Salt is providing the edible salt with best quality at lower cost to provide customer avalue for their money.

Dabur and Saffola have launched low sodium salt for the health conscious people, which is for thebetter living of the people.


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TECHNOLOGICAL FACTORS

National Research Development Corporation, Government of India Enterprise, is a premiertechnology transfer Corporation with four decades of experience. It has helped establish over one

thousand projects in the small and medium scale sector and which will help the different companies

to set up their own plants.

Basically, Refined Iodized free Flowing Salt Plants are mainly of five types:

Vacuum Refinery. Mechanical Refinery. Solar evaporation of sea water Sub-soil Lake brine

Companies are using the latest technology day by day to increase the production of the salt. Nirma ShudhSalt is using about 7 machines, which will produce about 10 packets in a second. That will help the company

to produce more and more.


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F I V E - F O R C E S A N A L Y S I S O F I N D U S T R Y

According to this model the competition in an industry goes well beyond the established players.

Through this five-force model the different companies are able to source the different competitive pressure

that highlights the critical strengths and weakness of the company, which will help the company to know

its position in the market, and able to highlight the areas where industry trends promise to hold the greatest

significance as either opportunity or threats. Here the primary focus will be on the strategy of the

individual industry. Following are some aspect, which are cover for the purpose of five-force model of the

salt industry.

1) THREAT OF ENTRY

~ No license fees:

The cost of entry is negligible. If the person has the capital and salt field from where he can

produce the salt in a large quantity, the person can start the business. However according to the role

of Government, every company in this industry has to produce the edible salt according thestandard set by them with respect to the iodization.

~ Minimum set up cost:

The company required not much of the initial cost as the raw material and the labour forces are

easily available. The company has just the cost of establishing the plant.

~ Price war:

There are big players existing in the market like Tata, HLL, Nirma, Dabur, and Marico etc., which

has the stiff competition for the price. The local players are also the major threats to the competitive

market.

~ Scope for expansion:

As the companies existing in the edible salt market has the over capacity of the production and they

are producing more than consumption of India, the new entrants will face a major problem for the

purpose of remaining in the market. Thus those companies that have the huge profit from other

sources will think about entering into this market.


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2) THREAT OF SUBSTITUTE:

The salt is consumed by the richest to rich and poorest to the poor and salt is the commodity, which

is required the most. For the purpose of health consciousness, salt is the best way to maintain the level of

iodine in the body. There is no substitute available for the salt and still there is no research is on for the

finding of the substitute. The salt is available in a huge quantity whenever and wherever required. Thus

there is no problem of availability of the salt at any point of time that will make the producers not to think

about the salt substitute. Thus as there is no threat of the substitute; the industry rivals will be able to

concentrate on other things rather than giving time on thinking about the salt substitute. However there are

companies who are thinking about introducing the edible salt in a tablet form. Thus there is a substitute for

the packaging but not for the commodity itself.

3) BARGAINING POWER OF BUYER

Because of the availability of different brands of edible salt, a very small income and low consumer

involvement require for the purchase of edible salt results in a very little cost for buyers on to other

players.

Low switching cost. Industry comprises of big as well as many local players. Customers are low price sensitive.

4)BARGAINING POWER OF SUPPLIER

The suppliers of the salt industry cannot able to increase the price of commodity because of the huge

stock available in the market that means the importance of the commodity is not vary much high to the

customers and it is the low involvement product which is not required much of the interest of the

customers to buy the product. Thus, whichever company will try to increase the price of the commodity

will loose the market drastically and not been able to achieve the growth as expected by the company.

Thus the bargain power of the supplier is not very influencing as compare to the bargaining power of the

buyer. The only advantage to the suppliers is the non-availability of the substitute product, which makes

the customers to remain with the same commodity.


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5) COMPETITIVE RIVELRYTata Salt (Tata Chemicals) is the market leader with sales of 0.29m-ton pa. Annapurna (HLL) and

Captain Cook (DCW Home Products) are the two other major brands, which sell about 0.2mn and 0.3mn

ton pa each. While Captain Cook is positioned on the USP of free flowing nature of its salt, Tata Salt is

positioned on purity platform and Annapurna is positioned on the health benefit impact of the iodine

content in the salt. Nirma and Dabur are the two latest entrants in the branded salt market. Tata Salt, the

first branded salt in the country, was launched in 1983. Tata salt is manufactured by Tata Chemicals as a

by-product of its water distillation plant. DCW launched salt in 1991. It has three plants in Maharashtra,

Gujarat and Tamil Nadu. In August 98, Corn Products Company (India) Ltd (manufacturer of Knorr brand

of soups) acquired the Captain Cook brand and the salt manufacturing facility at Gandhidham for a

consideration of Rs900mn. Corn Products, renamed as International Best foods Limited wef October 98,

will now be one of the leading players in the segment. Hindustan Levers Annapurna was launched in

1996. HLL operates three plants at Maharashtra, Delhi & Bangalore. Nirma is setting up a soda ash plant,

which will produce 280,000 TPA of salt as by product. The company is currently test marketing Nirma

Free Flow Salt. Nirma has the advantage of a well-established distribution network of grocery stores

(where its soap and detergent brands are typically sold). With its strategy of competitive pricing, thecompany has the potential to become a significant player in the segment Dabur has recently launched

Nutra salt, a low sodium salt. Marico has also launched Saffola salt which is a mineral enriched low

sodium salt. Both the above brands are positioned on the health platform, and are priced at a significant

premium to normal salt brands. Besides there are a large number of other local/regional brands in refined

and iodized salt.


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C O M P E T I T I V E A N A L Y S I S

The company, who wants to be the market leader in the edible salt segment, must know their

competitor from the bottom. Here we have tried to explore as many competitors as possible, which will

help the Nirma to know about their competitor. While talking about the different competitors of Nirma

Shudh Salt, let see where the company stands in the market first.

NIRMA INDUSTRIES LTD. (NIRMA SHUDH SALT)

Nirma is an over Rs. 17 billion brand with a leadership presence in Detergents, Soaps and Personal

Care Products, offering employment to over 15,000 people. Mr. K. K. Patel introduced the Brand in 1969.

Making phosphate free synthetic detergent powder by hand and selling it at Rs. 3/- per kg., when the

lowest priced detergent brand was Rs. 13/-. This value-for-money plank revolutionized the industry and

made fabric wash detergents available to the masses. Today, Nirma sells over 800,000 tones of it's

detergent products annually, giving it a 35% share of the Indian Market, which is the world's second

largest fabric wash products market. This makes Nirma India's largest detergent marketer and one of the

world's biggest detergent brands. Even though Nirma was a late entrant in 1990 in the highly competitive

toilet shop market, it is already the second largest manufacturer, selling close to 1,06,000 MT of bathing

soaps in 1999-00. The brand has over the years introduced products in toiletries and personal care with

soaps, shampoos and toothpaste, thus offering the consumer a complete product portfolio. Carrying on

Nirma's mission of providing 'Better Products, Better Value, Better Living' to its over 300 million

consumers through an efficient distribution network.

Following are the main competitors of Nirma Shudh Salt in the Edible Salt industry. The company can

only be successful if they know about their competitor very well.

TATA CHEMICALS LTD. (TATA SALT)

Launched in August 1983, Tata Salt was the first national brand of packaged salt to be marketed in

India. To millions of Indian housewives, it presented a welcome move away from the loose, unbranded salt

of suspect quality to the reassurance of clean, pure salt guaranteed by Indias most trusted business

house. Tata Salt leads the way as first mover and leader in the branded iodized salt market. It has a 17-per-

cent market share in the branded salt category and among national brands; its share is higher at 38 per cent.

The marketing strategy would be to continue expanding reach and availability of the product while

improving the market base. It will continue upgrading users of unbranded, unhygienic loose salt and

continue to improve product and packaging offering to the consumer. The company has also some social

responsibility and brand commitment and to this end has launched theDesh Ko Arpan programme where

10 paise on each pack of Tata Salt sold in a month would go to CRY. An average of three crore Tata Salt

packs are sold each month. Advertising for the product largely revolved around the television medium with

Doordarshan forming the dominant chunk of its media plan given it still has the highest reach especially in

areas like UP, MP and Bihar where vast numbers of consumers are unbranded and loose salt users. This

year will see TCL spend about Rs 10 crore on advertising between the Tata Salt and Samunder brands.

Though the market is competitive with multinationals and Indian firms alike pumping money into

messaging the consumer, Tata Salt will continue to lead as long as it reaches out and makes itself available.The company always has an ear to the ground to be in touch with the consumer's needs. The company is

also exporting their salt to the Middle East and Bangladesh.


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MARICO INDUSTRIES LTD. (SAFFOLA SALT)

Marico Industries with an extension of the Saffola brand equity, a 30-year old kardi oil brand associated

with "the heart of a healthy family", to salt which forms part of a larger purpose: to develop Saffola into a

strong umbrella brand riding on its age-old USP of "good for the heart". There was a need in the

marketplace for such a product, which cannot be directly, compared to other branded salts because of the

price premium those Saffola salt commands. Saffola salt is priced at Rs. 25 for a one kg jar (this is the first

time that the most common food ingredient salt is being introduced in a jar form. The price premium ispartly due to this additional cost). The company has launched the salt in select towns like Mumbai, Delhi,

Chandigarh, Calcutta and Pune at a special price of Rs. 20. The pricing may, a complete value to the

consumer who gets a re-usable jar along with the salt. The company may later look at introducing other

sizes and try to cut down on the cost, which would eventually bring down the price to the consumer.

However, this price would still be at a slight premium over other branded salts in the market due to its

unique qualities, put off a consumer whos used to paying Rs. 6 to Rs. 7 for a kg of common salt. Salt for

Saffola, well known among those health conscious consumers? The thinking behind extending the brand to

the common salt was simple: "Because salt is the main intake most consumers suffering from hypertension,

a common heart ailment, are asked to cut down on. They have tested the salt with doctors and have beenintrospecting on the concept for over a year now. It involves, in addition to iodizing the salt, a reduction of

around 25 per cent of sodium, which has been substituted by an equivalent amount of potassium. Further,

they have also not compromised on the taste element. The company has not yet launched any conventional

modes of promotions like advertising. The company feels that the Saffolaconscious consumer is the

company's primary target and that would mean four lakh households. As far as penetration is concerned,

Saffola salt, like the oil, will be an urban phenomenon. Although Saffola salt has been launched without

much fanfare, the repeat purchases since its launch a few days back are commendable.

HINDUSTAN LEVER (INDIA) LTD. (ANNAPURNA SALT)

Hindustan Levers Annapurna was launched in 1996. HLL operates three plants at Maharashtra,

Delhi & Bangalore. The company has achieved almost 30% market share across the country but not able to

do too much of the business in western segment. The company has more market share towards the northern

part of the country. The company has the advantage of best and most successful distribution network for

their different product line, which has help, the company to provide the edible salt whenever and wherever

required. The company has also launched its consumer schemes of two sachet of Clinic all Clear free withthe 1 Kg pack of Annapurna salt. The company is also focusing on the southern region of the country

where the local players has the more market share. The company has acquired the Captain Cook brand

from the Corn Products Company. The only brand where there is an overlap is Captain Cookin the staple

food categories of salt and atta. With both Captain Cookas well as Kissan Annapurna currently being sold

on an almost similar price platform, a re-look at the positioning of the Captain Cookbrand is inevitable.

Also problems faced post acquisition and inadequate marketing support has somewhat tarnished the equity

of this once extremely popular brand. But given that the brand even today enjoys a strong recall, it is

unlikely that Captain Cookwill die a silent death. A more likely possibility is that HLL will use Captain

Cookas a flanking brand, positioning it in a different consumer price segment, as has been HLLs strategy

in most product categories. Besides the brand provides HLL an excellent opportunity to strengthen its

position against Godrej Pillsbury and Tata Salt the two most potent competitors in the atta and salt

markets.


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KUN VAR AJAY INDUSTRIES (DANDI SALT)

Unleashing a multi-brand strategy, the company has decided to launch its first product, salt, under

the Dandi brand, with more products to follow under different brand names. With no synergies between the

two lines of business, the 20-year old saree player has decided to get adventurous and venture into the

guarded territories of biggies such as Hindustan Lever and the Tatas. Pricing their brand of Dandi on par

with the existing brands of Annapurna and Tata salt, the Rs 7 per one kilo bags are being made available at

a national level. Relying purely on internal funds, the company, which heavily advertised its saree brand

on a budget of nearly Rs 25 crore, has marked a healthy budget of Rs 10 crore for its new salt brand. Using

the USP of being a pure product, it is the triple-refined process in manufacturing which is expected to hold

the product in good stead (considering most branded salts are double-refined). The company has positioned

itself as the Amrit hai buddhi aur Shakti ke liye (good for the health and mind) that may make a difference

in this competitive industry. Realizing that distribution will be the key to getting its products accepted, the

company has already covered 414 towns reaching out to half-a-million retailers within the 14 weeks since

launch. It aims to reach out its salt to two lakh retailers by March. Besides, it has also decided to sell its

salt on an advance demand draft system, breaking away from the long credit-based system adopted for its

saree business.

CARGILL (INDIA) PRIVATE LTD. (NATURE FRESH):

Nature Fresh, Cargill India's staples brand, is forcing big names in the highly fragmented and

competitive market to take note of it. Catalyst presents insights into Operation Cargill. If Nature Fresh is

making big names in the industry sit up and takes note, it is because Cargill India is not exactly just a new

kid on the block. Cargill India Pvt. Ltd., the 100 per cent subsidiary of the Minneapolis-based, $49 billion agri

foods major, has varied interests. And given its historical strengths in agri-economy and logisticsmanagement, Cargill India is advantageously positioned to service its supply chain. And according to ORG-

MARG's retail store audit data, the size of the iodized branded salt market is estimated at 15 lakh tones per

annum (which works out to about Rs 500 crore by value). National brands comprise only 45 per cent share

of this market. Among other reasons, one reason why salt is bigger than other branded commodities is the

Government's iodization drive. According to Cargill officials, the new advertising will be significantly

different from the earlier communication. While ad and promotional budgets are not available, the company

says it is doing the needful to take the battle of the brand head on.

UNBRANDED\LOCAL PLAYERS

The major threat to any company in the edible salt segment is with the local unbranded players. There

is a huge market for the loose salt because of its cheapest price. This unorganized sector has covered about

85% market of the edible salt market. If any company will overcome this problem then there is a huge

market for the edible salt. There are many local players existing in Gujarat, namely, Taja, Tara, Haathi,

Sagar, Ambica, Shagun, Umiya etc. they are major threat to the edible salt industry, which must be

overcome.


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P R O M O T I O N A L C A M P A I G N I N E D I B L E S A L T I N D U S T R Y

Tata company manufactured Tata Salt, Indias first iodized salt. The first competitive challenge

came in the early 1990s with the launch of Captain Cook. Positioned as a freeflowing salt, it helped create

awareness about brands in the salt segment. Tata Chemicals responded by releasing ads to counter CaptainCooks claims. As more consumers moved from non-branded or local products to the national brands, Tata

Salts inherent superiority and strong distribution network ensured its continuing growth in terms of market

share and category expansion. In 1996, Annapurna, another national salt brand, was launched. It was

positioned on the health benefits of iodine. Iodization had become almost a hygiene factor and consumers

did not perceive it as a differentiator. The rising number of players in the branded-salt segment got Tata

Chemicals to think of strategies to combat the possibility of its market share being eroded. In 1998, the

company conducted a comprehensive market research study to understand the consumer psyche. The

results ranked Tata Salt high on attributes such as iodization, free flow, purity and whiteness (consumers

thought of Tata Salt as a saltier salt).

Acquired from DCW Home Products Ltd for an estimated price of Rs 85 crore, the brand is back

on retail shelves after a hiatus of nine months. Captain Cook is available at an introductory price of Rs 6

per one kg pouch, which is a 25 per cent discount to brands like Kissan Annapurna from Hindustan Lever

and Tata Chemicals' Tata salt. Although the company was not available for comment, an International Best

food has not made any major changes in the product packaging. Even the ad campaign, is a re-run of the

mid-nineties campaign.

During the past one year, the complexion of the Rs 100 crore branded salt market has changed

considerably. There is a new entrance in the market -- Marico Industries Limited -, which launched twovariants of branded salt under the Saffola umbrella. The existing players, Tata Salt and HLL's Kissan

Annapurna salt have been aggressively pitching for market shares. Tata Salt and Annapurna have gained

market share at the expense of Captain Cook, which has lost around four per cent market share to 11 per

cent due to erratic supply over the past one year. Tata Salt leads the market with an estimated share of 33

per cent. The second in the rung is Annapurna, with close to 16 per cent share.

Owing to increased competition in the marketplace, the `free flow' proposition that had established

the Captain Cook brand in the early 1990s is quite basic to the category by now. Marketers have started

àdding value' and hard selling ingredients in the branded commodities market.

While Tata salt changed its positioning to `vacuum evaporated ' from ìodized salt' a few months ago,

the product ingredient ìodine K15' is the focal point of communication for Annapurna salt. Marico

Industries is also not offering anything basic with its `potassium enriched salt' that hinges on the strong

`heart care' equity of Saffola. Analysts say that Captain Cook has challenging times ahead in a competitive

environment. With branded salt contributing close to 20 per cent of a five million-tone market, this category

has huge potential going by the 20 per cent growth per annum.

AFTER colas and toothpaste, the stage is set for another potential ad war on the fast moving consumer

goods front. This time around, it is the good old salt, which is turning out to become the bone of contentionbetween two major players. Tata Chemicals, which markets Tata Salt, has taken umbrage to the electronic

campaign for Hindustan Lever's Annapurna salt. Tata Chemicals has approached the Advertising Standards


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Council of India (ASCI) against the currently on air advertising for Annapurna salt, which ends with a child

bidding goodbye (or `Tata') to all other salts available in the market.

According to ORG-MARG estimates, the domestic branded salt market, by volume, is estimated at

15 lakh tones. Tata Salt leads in the branded salt market with a market share of 18 per cent, according to a

recent ORG-MARG retail audit. HLL's Annapurna, which has been very aggressive in marketing-related

activities in the recent months, has a market share of 16 per cent.

Another recent entrant to the branded salt category is Dandi salt. While this brand is being advertised

heavily on regional channels, it has managed to gain only a 1.5 per cent share of the branded salt market,

according to ORG-MARG estimates.

Apart from Tata Salt and HLL's Annapurna, the market share of other players is by and large

fragmented, according to industry analysts. The unbranded sector continues to control a sizeable share of the

overall salt market in the country.


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N I R M A I N D U S T R Y

INTRODUCTION

Nirma is the Rs.17 bilion Detergents, Soaps and Personal Care Products

Brand, a

market leader in the Indian detergent market and

second largest in bathing soaps... the brand NIRMA being one of the world's

biggest in

it's segment... a result of it's mission to provide

'BETTER PRODUCTS, BETTER VALUE, BETTER LIVING'.

Shri Karshanbhai Patel's vision introduced a new philosophy or approach, which held that better

quality, can be offered even at lower prices. NIRMA in late seventies introduced the concept of TOTAL

QUALITY MANAGEMENT (TQM) in Indian detergent market. It not only followed kaizen & kanban

the famous management philosophies. But more importantly it followed them successfully.

At NIRMA, they first identify the market, establish themselves there & then try for a market unlike

others who first advertise & then try for a market share. His philosophy has always been: " first test the

market & then advertise, Go to the public with a good product, establish it in the market & then go for

publicity."

The cornerstone of Nirma business philosophy is captured pithily in their new slogan, "Better

products, Better Value, Better Living."

Karshanbhai's business policy may be stated thus: " Good quality at a affordable price makes

selling automatic."

Karshanbhai's NIRMA was catapulted by " A smart pricing strategy for a particular quality to a developing

mass market."


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Shri Karshanbhai Patel attributes his entrepreneurial success to:

Enjoying work more than the monetary gains. Enjoying smile on the faces of a satisfied NIRMA customer. Ability of taking right decision at the right time.

Vision, Mision & Philosophy

Nirma is a customer-focused company committed to consistently offer better uality products and

services that maximize value to the customer.

This customer-centric philosophy has been well emphasised at Nirma through:

Continuously exploring & developing new products & processes. Laying emphasis on cost effectiveness. Maintaining effective Quality Management System. Complying with safety, environment and social obligations.

Imparting training to all involved on a continuous basis. Teamwork and active participation all around. Demonstrating belongingness and exemplary behavior towards organisation, its goals and objectives.Nirma is a phenomenon and synonymous with Value for Money. The brand transcends the specific

dynamic of any particular product category, which is best captured in its above mission statement a

statement of sustained innovation, an unceasing effort to deliver better value to consumers, through better

product quality.

Shri Karshanbhai, from a chemist with Gujarat Government's department of mining & Geology became

the owner of the market leader in detergent business. His business vision & ability to understand whatconsumer need & wants, allowed him to transform his backyard business into a reputed market leading

company. India is a famous for the leader like Dhirubhai Ambani, J.R.D. Tata, Azeem Premji, and

Narayan Murti. Among the corporate leaders of Gujarat, Shri Karshanbhai Patel's name stands apart.

Shri Karshanbhai's success is the inspiring story of a self-made man who inherited neither a family

business nor a business background. Coming from a family of farmers he has risen to be among the most

powerful impact generating entrepreneurs of our country.

Shri Karshanbhai Patel, a down to earth man started a moon-lighting activity choosing to manufacture a

down-to-earth product for the ordinary, average, not-too-rich, not-too-sophisticated consumer & met sky

rocketing success leveling multinational like Hindustan Lever in lower and humbler clouds.


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Karshanbhai was born in 1944 in Ruppapur, a small village in Gujarat. Karshanbhai's went to school there

& later at the age of nineteen, qualified as a chemist with a B.Sc. Degree. For the next six years, he worked

as a laboratory technician first at the cotton mills & later in the Gujarat Government's Department of Mining

& Geology.

In his free time in the evenings, with the limited know-how he has acquired at work, he started

experimenting in the background of his house to produce liquid detergent. The idea, however, has to bepromptly abandoned, as liquid detergent was difficult to make & would certainly be difficult to market, for

it was too new a concept for the consumer.

Then he tried his hand at making detergent powder & succeeded. The production started in 1969, with

initial investment of Rs. 1000/- borrowed from friends & relatives. Karshanbhai set up a company

"NIRMA Chemical works" named after his one -year -old daughter Nirma (Nirupama). The process of

manufacturing the detergent powder was manual & required no sophisticated machinery or technology.

For the next three years, Karshanbhai managed a one-man show in the time he had at his disposal after hisoffice hours. At that time, he followed one man - door-to-door marketing. Slowly and gradually, price-

conscious housewives became eager buyer of this homemade and low-priced (Rs. 3/kg) product.

Karshanbhai was selling on a satisfaction or refund basis. Thus a whole new market of middle-class

consumer was created. Initially, the powder was sold to some friends and relatives, then to us many

customers as Karshanbhai could pedal to, a new salesman were hired on commission basis for selling door-

to-door.

A salaried chemist by day and manufacture, distributor and service manager by evening, Karshanbhai

became a well-known figure though his personalized attention to his customers. The demand for his

product increased, the profits improved and the future crystallized. He gave up his Government job and

expanded his moonlighting ventures into a fall-time manufacturing operation in 1972.

At this stage, he found small 12-sq. yard industrial shed in Khokhara Mehmedabad near Ahmedabad and

shifted his production there. Within three years, Nirma had established a market in Gujarat and Maharastra.

Then came on the plastic bag of the detergent powder, now nation wide picture of his dancing in a sparkling

white frock. In 1977, Karshanbhai started advertising on the radio! Slides were made for advertising on the

cinema screen also. These were followed by the resounding television advertisements. All this publicity paidof in rich measure. Within five years, Nirma was visible on the national scene. Nirma had distributed the

well-settled Hindustan Lever and notched up 60% of the


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powder market share in the western region and dislodged Hindustan Lever from the first position. An almost

primitive manufacturing process and some ingenious marketing was giving the professionally-managed

company's product a run for its money. Karshanbhai's company has always used a well-planned business

strategy and marketing policy to hold its price line. Increase in the costs of raw material and labor has been

offset by increase in production. Nirma have used the concept of value engineering. They avoided the use of

those ingredients, which did not give functional value for the money. Karshanbhai's looks at his cost versus

what people are willing to pay. Today, round about 5,00,000 retailers watch Nirma packets disappear fromtheir shelves. Nirma is the impressive success story of the simple. Unassuming man is manufacturing a

down-market product by using appropriate technology. Which is neither very modern nor sophisticated. It is

the story of a company that rose from a 12-sq. yard covering factories at Vatva, Chhatral and Mehsana in

Gujarat. From making a small lot of a powder once a week in 1969, Karshanbhai moved up to 500 kg. A

month in 1972 and today is selling 1,200 tunes of powder 700 tunes of detergent cakes per day. Over 200

trucks line up near he gates of Nirma plants, to pick up the product to satisfy the large and growing demand

steadily at he rate of 50% for the last 14 years. In no country anywhere in the world does one company sell

much detergent less than one brand name.


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PRODUCT L I S T

DETERGENT POWDERS:

Nirma washing powder Super Nirma detergent powder Nirma popular detergent powder Green Nirma washing powder Nima detergent powder

DETERGENT CAKES:

Nirma popular detergent cake Nirma detergent cake Super nirma detergent cake Nima green detergent cake Nima blue detergent cake Nimabartan bar Nirma clea

BATHING SOAPS:

Nirma beauty soap Nirma bath soap (carbolic) Nirma premium soap Nirma lime fresh soap Nima rose Nima lime Nima winner Nima sandal Nirma rose Nima herbal Nirma herblina

OTHER PRODUCTS:

Nirma beauty shampoo Nirma shikakai Nirma toothpaste Nirma shudh iodized free flow salt


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INDUSTRIAL PRODUCTS:

Sulphuric acid Linear alkyl benzene Glycerin Fatty acids Soda ash

MANUFACTUIRNG PLANTS:

Mehsana Gujarat Ahmadabad Gujarat Bhavnagar Gujarat Rajkot Gujarat Dhar Gujarat Kanpur Gujarat


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NIRMA SHUDH SALT

The edible salt industry in India is unique in away that it is only 10% branded the rest constitute of

unbranded loose salt. The per capita consumption is 6 kg though the point to ponder is the rate at which

unbranded market will convert to the branded. Nirma has decided to become the driver of this growth. The

salt market provides attractive avenues for Nirma, as there are huge volumes and low branded salt

penetration. Nirma salt has one of the best qualities in terms iodine content of 30 ppm, free flow property,

whiteness and saltiness. It is refined through a process, which retains natural mineral content in balanced

quantity. The moisture proof pack keeps Nirma Iodized Salt non sticky and fresh. The salt is available in 1

kg pack size.

M A R K E T I N G S T R A T E G Y

"Marketing strategy is nothing but a combination of decisions bearing of the various aspects of marketing

mix". These are product, pricing, delivery, distribution, packaging and promotion. NIRMA concentrate

more on all aspect that's why NIRMA has very good market in not only Gujarat but also in other state of

the India.

1. For product planning: NIRMA take decision for new product whether product or not? Then they research the product by research department. Research departments are divided as under:

2. MIS: In this step they collect details about competitors product. They saw the pricing of product features, advertisement, packing fragrance promotion of

product etc.

3. After this two-step they do the production of a particular product.


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M A R K E T S E G M E N T A T I O N

We know that market segmentation means dividing a market into district groups of buyers with different

needs, characteristic or behavior. We might require separate products or marketing mixes? It refers to

large heterogeneous market into smaller homogeneous parts in order to select any one out them in which the

company thinks it satisfy customer more effectively different products for different segmentation.

Male/female segmentation & fragmentation are also part of market segmentation. For larger, the target is

fulfilling by the help of advertisement & promotional There are different classes of people purchasing the

product of NIRMA, like

Lower middle class family Middle class family Upper middle class family Higher class family

P R I C I N G P O L I C I E S

Price refers to the value of product attributes. Expressed in monetary terms with a customer pay

or is accepted or afford utility. Value is referring to the quantitative aspect product relative to other

product.

In NIRMA, Pricing Policies of work like as under:

MISFirst MIS show the price of competitors.

Parallel Pricing Policy:1. Bunch marketing

2. Profit margin They give 5% to retailers 1% to distributors & the company will get the

remaining profit.

Nirmas main objective is service rather than profit. No doubt there is profit but pricing is just to

meet minimum margin. Thus it has bee observed that their pricing policy is very effective in the rural

market. Co mpany wants to maximize its profit then unit established higher policy. The co mpany wants to cover

the larger part of the market and for that the company may establish negligible pro fit policies fo r its different

products.


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CHANNEL OF DISTRIBUTION

The channel o f distributions will p lay an important role for the company that are operating theirbusiness in the edible salt market because people will buy only that product which will be available at thepurchase outlet. The level of brand switching is high here. Thus channel of distribution will play animportant role for effective reach to the end consumer.

FACTORY

AGENTS

DEPOTS

RETAILERS

WHOLESELLER

CONSUMERS

The other channel of distribution is as follows:

COMPANY

STOCKPOINT

DISTRIB UTORS

RETAILERS\WHOLESALER

CONSUMER


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SALES P R O M O T I O N

We know that sales promotion means short-term incentives to encourage purchase or sales of a

products or services. The company, Nirma is also providing sales promotions to promote their brands

like:

CONSUMER PROMOTIONS TRADE PROMOTIONS SALES FORCE PROMOTIONS

PROMOTIONAL EXPENCES

NIRMA does promotional expenses as under:

TOTAL PROMOTIONAL EXPENSE

(3% OF SALES)

ADVERTISING SALES PROMOTION

PRESS TELEVISION CINEMA RADIO OUTDOOR

25% 35% 20% 15% 5%

Among all tools of promotion, advertising is given prime importance by the company. That can be

seen from the above chart. More stress is put on Television. Press Media is also given importance.


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SWOT ANALYSIS OF NIRMA SHUDH SALT

A scan of the internal and external environment is an important part of the strategic planning process.

The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities

to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and

selection.

The company Nirma has following strength and weakness, which will help the company to decideabout the future planning for their success in their edible salt business.

STRENGTHS

Strong Brand equity. Nirma is an Rs. 17 billion-umbrella brand offering consumers a broadportfolio of products at multiple price points in the Detergents, Soaps, Salt and Personal Care

market.

Produces a range of industrial chemical products which primarily serve as raw material orintermediates for Soaps & Detergents business.

Wide distribution network. Good advantage in the rural market because of its price.

WEAKNESS

High interest burden Less presence in premium segment Lacking in the export market


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OPPORTUNITIES

Exports Acquisitions for strengthening its distribution tie-ups. Entry into the South Indian market where there is a huge market for edible salt, which is not,

captured by any national player and occupied by the unorganized sector. Entry into the tablet salt market. Government rule of selling only iodized salt, which will generate a huge market.

THREATS

Emergence of regional but strong players. Entry of many big players like Adani, Marico, Kunvar Ajay etc. is a big disadvantage. Poor quality image of a company about the product in the urban areas.


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(1) Do you use Iodized Salt or Unionized Salt?

(_) Iodized (_) Unionized

Now a days most of the people are aware about the benefits of the Iodized Salt because iodine is a

Necessary requirement of a body and it will also helpful in curing some diseases like Thyroid, Goiter. Thus

the awareness regarding the iodized salt is necessary. Following are some numbers which will

Shows the awareness regarding the iodized salt in a particular area

No of respondents

Iodized Salt 229229

Unionized Salt21

Interpretation:

From the graph we can conclude that there are 92% of the respondents are aware about the Iodized

salt and they are using Iodized Salt and still 8% of the respondents dont know about the Iodized Salt. Sothere is more chance of occurring iodine deficiency disease to them.


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(2) Which brand of Iodized salt do you use?

TATA 76

NIRAMA 49

ANNPURNA 34

DANDI 30

SAFFOLA 12

CAPTAIN COOC 12

LOCAL 16

Interpretation:

On the basis of this question preference for using Nirma Shudh Salt with other is easily found out by

Respondents, so one can have rough idea about the market standing of the Nirma Shudh Salt with Other

brand. Here TATA Salt is leading with 33% of the market of the Iodized Salt and it is followed by the Nirma

Shudh Salt as 22% of the market of the Iodized salt. Annapurna and Dandi having shares of 13% and 15%

respectively. In my sample size there are 7% of the respondents who are using local brands like Ambika and

Taja salt. So I conclude that awareness regarding Nirma Shudh Salt is up to the mark as 22% of the market

share of Iodised salt is acquired by the Nirma Shudh Salt. Nirma Shudh is not able to grasp good market

though it has a good distribution network. Actually there is a need for the company to convenience people

through advertisement to purchase their brand at a lower cost and best quality.


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TATA NIRMA DANDI ANNPURNA CAPTAIN

COOK

OTHERS

MANINAGAR 14 9

Documents

Nirama Shadhu Salt Grand Project Report