7/31/2019 NIRMASHUDH [ pancholi chirag ]
1/130
SUBMITTED BY: SUBMITTED TO:
PROF. PINA VYAS KHATSURIYA KARTIK M.
KOTIA AJAY B.
IN THE PARTIAL FULLFILMENT OF MBACOURSE
S.K.PATEL INSTITUTE OF MANAGEMENT & COMPUTER STUDIES
GANDHINAGAR.
SKPIMCS 1
7/31/2019 NIRMASHUDH [ pancholi chirag ]
2/130
PREFACE
Practical study plays a vital role in the field of education. Howmanagement principles are implemented in business can only be
known through practical study, students can be very well aware
about industrial environment like problem, opportunities, different
situations etc. this helps the student for better understanding and
also gives them a chance to show their skills and ability.
This report throws lights to one of the key sector of human health.Edible Salt Industry, which has in the limelight due to its rapid
development towards the iodized progrmme by the World Health
Organization and the Government of India and emergence as a major
contributor to the export of the country, which will, leads to the
economic progress of the country.
The report seems in such a manner that can give comprehensive andrelevant aspect bout the edible salt industry and especially with
respect to the Nirma Shudh Salt, which is racing towards capturing
the salt market of the country. In the first phase the current scenario
of the edible salt industry, then it reflects on what are the retailers as
well as the consumers of the Nirma Shudh Salt except from the
company through the medium of customer as well as retailer survey.
We hope that the report is fulfilling all the requirements as per the
rules and regulations of the University as well as the Company
Officials.
SKPIMCS 2
7/31/2019 NIRMASHUDH [ pancholi chirag ]
3/130
ACKNOWLEDGEMENT
We, the students of S.K.Patel Institute of Management & Computer
Studies are extremely thankful to our institute for giving us an
opportunity to undertake this Grand Project.
We are very much thankful to Mr. Bhargav (HR Manager) ofNirma
Industries Ltd. for providing us the permission to undergo a grand
project under their supervision. We are also very much thankful to
Mr. Shmyak shah (Marketing Executive) at Nirma Consumer Care
Ltd., for patiently responding to our various queries and for his
valuable guidance. We are also thankful to Director S.C.Chinnam
Reddy, Prof. S.K.Mantrala (CO-ORDINATOR) and Prof. Pina Vyas for
providing us the helpful support for completing the report in a given
schedule. Thanks for their benevolent support and kind attention.
Their valuable guidance at each and every stage of the project
always gave a Phillip to our enthusiasm.
Last but not the least we express our gratitude to all people who are
directly or indirectly involved in the preparation of this report.
KHATSURIYA KARTIK M.
KOTIA AJAY B.
SKPIMCS 3
7/31/2019 NIRMASHUDH [ pancholi chirag ]
4/130
EXECUTIVE SUMMARY
Today the Edible Salt market is growing very rapidly because of the
Government regulations of iodized salt. The iodized salt is now
becoming the first requirement of the people. Salt is a commodity
that is consumed by richest to rich and poorest to the poor. There are
various edible salt manufactures in India and who are fighting hard to
remain in the competitive market.
Basically the aim of making the report is to find the satisfaction level
of consumers as well as the retailers of the Nirma Shudh Salt and to
know the Edible Salt Industry as a whole. The sample size of the
household was around 550 and the retailers were about 250 taken for
the purpose of the survey that was conducted at Bhavnagar, Rajkot,
Porbander, Kalol, Gandhinagar & Satellite, Bapunagar, Naroda, Vadaj,
Vejalpur, and Khanpur areas of Ahmedabad for the period of 3
months.
Basically our study is based on market research of customers as well
as retailers that are using or selling Edible Salt brands. Our main
focus was to know about the market of Nirma Shudh Salt and for that
we have asked about the perception of the retailers as well as of the
consumers regarding the factors like margin, price, trade &
consumers promotion requirements, distribution network,
advertisement, brand awareness etc.
The Edible Salt Industry is facing a stiff competition amongst the
existing players. There are many players existing in the industry like
Tata salt from Tata Chemicals, Nirma Shudh salt from Nirma
Industries, Annapurna salt and Captain Cook from HLL, Dandi salt
from Kunvar Ajay Industries, Nature Fresh salt from Cargill Industries,
SKPIMCS 4
7/31/2019 NIRMASHUDH [ pancholi chirag ]
5/130
Saffola salt from Marico Industries and the local unbranded players
are the major threats to the industry.
We have found that the Tata Salt is the market leader in the Edible
Salt Industry. The Dandi, Nirma Shudh Salt occupies the second
position. The consumers of the Nirma Shudh Salt are not too much
happy with the quality of the product according to its price prevailing
in the market. Consumers are not finding any difficulty with the
availability of salt. Retailers are also satisfied with the margin of the
Nirma Shudh Salt. Retailers, however, convince that the level of
brand awareness is not too high. The overall response for theperception regarding the Nirma Shudh Salt is average. However the
company has the advantage of effective television advertisement
with retailers pushing the brand in a very effective manner.
Nirma Shudh Salt, the company that has the advantage of effective
distribution network, will find the road very tough to reach to the pick
of the industry as tata has adopted the way of emotional campaign toattract the customers. The company is also not been able to exist in
the whole country is a question. The company, to become a
successful player, must improve its brand image for its quality in the
mind of the customers. The company also wants to stabilize its price
throughout its areas of existence.
SKPIMCS 5
7/31/2019 NIRMASHUDH [ pancholi chirag ]
6/130
INDEX
SR.NO.
CONTENTS PAGE
NO.
01 RESEARCH METHODOLOGY 01
02 LIMITATIONS OF THE STUDY 07
03 INTRODUCTION TO THE SALT INDUSTRY 09
04 INTRODUCTION TO THE EDIBLE SALT
INDUSTRY
17
05 SALTS SWEET SUCCESS 19
06 PEST ANALYSIS OF INDUSTRY 23
07 FIVE FORCES ANALYSIS OF INDUSTRY 28
08 COMPETITIVE ANALYSIS 32
09 PROMOTIONAL CAMPAIGN IN EDIBLE SALT
INDUSTRY
39
10 NIRMA INDUSTRIES LTD. 43
11 SWOT ANALYSIS OF NIRMA SHUDH SALT 56
12 A SURVEY OF CONSUMERS OF EDIBLE SALT 59
13 A SURVEY OF RETAILERS OF EDIBLE SALT 99
14 FINDINGS 121
15 SUGGESTIONS & RECOMMONDATIONS 127
16 APPENDIX 130
SKPIMCS 6
7/31/2019 NIRMASHUDH [ pancholi chirag ]
7/130
17 BIBLIOGRAPHY 134
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 few
months ago. 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 salt as well as the satisfaction level
with the retailers regarding the Nirma Shudh Salt and what are the
problems they are facing regarding the product.
SKPIMCS 7
7/31/2019 NIRMASHUDH [ pancholi chirag ]
8/130
OBJECTIVE OF THE STUDY
To study the Consumer Preference for Edible Salt at Nirma
Consumer Care Limited with special reference to City like
Ahmedabad, Bhavnagar, Gandhinagar, Kalol, Porbandar &
Rajkot.
To study the awareness about Nirma Shudh Salt which has
relaunched few months ago.
To know the brand awareness of Edible salt in those cities and
to illicit the consumer opinion about price, quality, reasons for
choice, brand satisfaction etc.
To study the purchasing pattern of Edible Salt.
To know the retailer satisfaction criteria as well as the brand
preference given by them for increasing the sale of a particular
brand of edible salt.
SKPIMCS 8
7/31/2019 NIRMASHUDH [ pancholi chirag ]
9/130
RESEARCH DESIGN
A research design is the specification of 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 from which sources and from which producer of this
competitive environment.
Generally, there are basic three types of research design,
Exploratory, descriptive and Casual research. Here we have taken
Descriptive Research Design and the reason behind it is as follows:
The Descriptive Research Design is used when the researcher is
interested in knowing the characteristics of certain group. Here we
are interested in knowing the proportion of people in a given
population have behaved in a particular manner making projection of
things or determines the relationship between two or more variables.
The objective of the study will answer who, what, when, where, and
how of the subject under investigation for consumers as well as
retailers. It is therefore necessary that we will give sufficient thought
for framing research questions and deciding the type of data to be
collected.
SKPIMCS 9
7/31/2019 NIRMASHUDH [ pancholi chirag ]
10/130
DATA COLLECTION METHOD
PRIMARY DATA:
Using two methods, the data has been collected:
Observation:
The purpose of observation was to have a look on the actual condition
in which of the salt and which brand of salt are used by consumer.
With the help of Retailers, we have seen the consumers observation
as actually, how much and which brand of salt they are using at
present? What is the purchasing pattern of consumer? etc.
We have also try to know about the retailers preference through their
way of behaviour regarding the particular brand of product and we
have tried to know how much are they satisfied with the selling of a
particular brand of salt.
Questionnaire method:
The questionnaire is divided into two methods that is Structured and
Non-structured Questionnaire Method. We have used the Structured-
Non-Disguised Questionnaire that is the part of a Structured
Questionnaire. In that Method, the listing of question is a pre-
arranged order and object inquiry is revealed to the respondent. We
have done the pilot survey of 20 customers for checking out validity
of our questionnaire and then we have finalized our questionnaire for
the survey purpose.
SKPIMCS 10
7/31/2019 NIRMASHUDH [ pancholi chirag ]
11/130
7/31/2019 NIRMASHUDH [ pancholi chirag ]
12/130
SAMPLING 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 of Element,
Sampling extent and time. We have conducted a survey on the
consumer and retailers to know the preference and satisfaction level
for Edible Salt users (at Nirma Consumer Care Limited) with special
reference to five cities of Gujarat. These specifications are as follows:
Element: Buyer as well as the Seller of Edible Salt.
Sampling unit: Household & retailers.
Extent: Ahmedabad, Bhavnagar, Rajkot, Porbandar, Kalol and
Gandhinagar.
Time: Three months
Specifying the sampling method:
It indicates how the sample units are selected. We have selected
Probability Sampling and Random Sampling Method. The project lastfor about 4 and a half months and cover almost five major cities of
Gujarat.
Sample size decision:
For using the stratified sampling method, we have divided the cities
according to the Zone wise. And the Ahmedabad city is covered with
many areas but here we have been guided to choose only six areas
like Satellite, Vadaj, Vejalpur, Khanpur, Bapunagar and Naroda. Forthe other cities, we have selected the areas, which are almost the
true representative of the whole city.
Selecting the sample:
A good deal of fieldwork is involved in the actual selection of the
sampling elements. We have tried very hard to find out the correct
SKPIMCS 12
7/31/2019 NIRMASHUDH [ pancholi chirag ]
13/130
representative of the city that will give us the clear indication of the
consumer as well as the retailer preference.
LIMITATIONS OF THE STUDY
The limitations of the study carried out are as follow:
This study is limited to five cities of Gujarat only that are
Ahmedabad, Bhavnagar, Kalol, Gandhinagar, Porbandar and
Rajkot.
Due to limited period of time and unavoidable circumstances,
we have considered the survey with only 540 households and
250 Retailers for knowing about consumer preference and
retailers preference about the Edible Salt.
The accuracy of the project and conclusion is totally dependent
on the data collected and analyzed.
The sample size is too small to predict the future growth of the
edible salt industry.
It may be possible that the information collected from both
retailers as well as the consumers may not match, as their
answer may be biased.
SKPIMCS 13
7/31/2019 NIRMASHUDH [ pancholi chirag ]
14/130
SKPIMCS 14
7/31/2019 NIRMASHUDH [ pancholi chirag ]
15/130
INTRODUCTION
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 forthe 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 per annum, 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. 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%
SKPIMCS 15
7/31/2019 NIRMASHUDH [ pancholi chirag ]
16/130
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.
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 during 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
SKPIMCS 16
7/31/2019 NIRMASHUDH [ pancholi chirag ]
17/130
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.
SALT WORKS & ACREAGE UNDER SALT PRODUCTION
There are about 9571 salt works in 2001, mostly in small-scale sector
engaged in the production of salt. The total area under salt
production is about 5 lakh Acres. The salt manufacturing activities
provide direct employment to about one-lakh persons per day.
Year Category-I
(with area
above 100
acres)
Category-ii
(with area
above 10 &
below 100
acres)
Category-iii
(co-op. Societies
- per member
holdings up to 10
acres)
Category-
iv
(with area
below 10
acres)
Total
1997 380393 24543 37162 32329 4744271998 388794 24506 37298 32572 4831701999 399521 23602 36247 33123 4924932000 400298 23632 35097 36777 4958042001 400696 23766 34172 36749 495383
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
SKPIMCS 17
7/31/2019 NIRMASHUDH [ pancholi chirag ]
18/130
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, andthe 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 videMinistry of Industrys Notification dated 09.09.1981 still continue to
be in force.
EXPORTS
Despite being among the largest producers of salt in the world, Indiahas 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
SKPIMCS 18
7/31/2019 NIRMASHUDH [ pancholi chirag ]
19/130
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 Sambhar Salts-- 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.
SKPIMCS 19
7/31/2019 NIRMASHUDH [ pancholi chirag ]
20/130
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.
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 andquality monitoring of iodized salt at the production centers under the
National Iodine Deficiency Control Programme (NIDDCP). The Salt
Department has registered more than 940 units with annual installed
capacity of 147 lakh tones.
SKPIMCS 20
7/31/2019 NIRMASHUDH [ pancholi chirag ]
21/130
INTRODUCTION
SKPIMCS 21
7/31/2019 NIRMASHUDH [ pancholi chirag ]
22/130
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. An individual'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 requiresstandardization 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 Lever 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 Annapurnas market 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 and Natural Fresh had market shares of 0.97 per cent,
SKPIMCS 22
7/31/2019 NIRMASHUDH [ pancholi chirag ]
23/130
1.37 per cent and 0.14 per cent respectively. In March 2002, the
market share of Tata Salt touched 39 per cent, while Annapurnas
market 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 enhancethe brand muscle of Tata Salt.
While Captain Cook is 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 LeversAnnapurna 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 Saffola 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.
SKPIMCS 23
7/31/2019 NIRMASHUDH [ pancholi chirag ]
24/130
SALT'S SWEET SUCCESS WHY 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 2000-01 - 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
SKPIMCS 24
7/31/2019 NIRMASHUDH [ pancholi chirag ]
25/130
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, positionedas 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 amountsto 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
to kitchen salt, one segment that has remained the stronghold of the
Delhi-based Rs 700-crore DS Group is that of table salt. The table saltmarket 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
SKPIMCS 25
7/31/2019 NIRMASHUDH [ pancholi chirag ]
26/130
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.
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 `iodine 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', `iodized', `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.
SKPIMCS 26
7/31/2019 NIRMASHUDH [ pancholi chirag ]
27/130
Of course, distribution muscle is key. Tata Salt penetrates semi-urban
and rural markets through economy pack sizes and forms and
product development for newer, more `evolved' 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 portfolio as 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.
SKPIMCS 27
7/31/2019 NIRMASHUDH [ pancholi chirag ]
28/130
PEST ANALYSIS OF INDUSTRY
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 in the edible salt segment.
It is when a legion of 70 million goiter-affected people stand as
a pointer to the magnitude of iodine deficiency 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. It controls 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 World Health Organization.
The Central Government also supervises equitable distribution,
monitors quality and prices, ensures maintenance 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 and monitoring development and the
SKPIMCS 28
7/31/2019 NIRMASHUDH [ pancholi chirag ]
29/130
labour welfare schemes. And if the issue is one of loss of
employment 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 industry form VAT that will be
implemented from 1st of May.
The Centers recent decision to impose anti-dumping duties on
soda ash imports from China has been 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.
ECONOMICAL FACTOR
The U.S. is the world's largest salt producer as well as the
largest consumer. The U.S. salt industry earns 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 that the 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 5 million 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.
SKPIMCS 29
7/31/2019 NIRMASHUDH [ pancholi chirag ]
30/130
The annual increase in overall demand for the commodity is
pegged at a healthy 10 per cent and by 2005; 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 market with 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 firm are the major threats to
the market leader.
SOCIOCULTURAL FACTORS
Iodine deficiency is the single most important cause of
preventable brain damage and mental retardation, most of the
damage occurring before birth. It also significantly raises the
risk of stillbirth 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 has launched the Desh Ko
Arpan programme where 10 paise on each pack of Tata Salt
sold in a month would go to CRY.
SKPIMCS 30
7/31/2019 NIRMASHUDH [ pancholi chirag ]
31/130
The salt is being consumed by richest to the rich and poorest to
the poor, so the Government maintains the affordability of the
price.
Nirma Shudh Salt is providing the edible salt with best quality
at lower cost to provide customer a value for their money.
Dabur and Saffola have launched low sodium salt for the health
conscious people, which is for the better living of the people.
TECHNOLOGICAL FACTORS
National Research Development Corporation, Government of India
Enterprise, is a premier technology 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 Plantsare 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 Shudh Salt is using about 7 machines,
which will produce about 10 packets in a second. That will help the
company to produce more and more.
SKPIMCS 31
7/31/2019 NIRMASHUDH [ pancholi chirag ]
32/130
FIVE-FORCES ANALYSIS OF
INDUSTRY
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.
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 the standard 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.
SKPIMCS 32
7/31/2019 NIRMASHUDH [ pancholi chirag ]
33/130
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 theover 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.
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
SKPIMCS 33
7/31/2019 NIRMASHUDH [ pancholi chirag ]
34/130
tablet form. Thus there is a substitute for the packaging but not for
the commodity itself.
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.
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 thatmeans 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 ofthe 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.
SKPIMCS 34
7/31/2019 NIRMASHUDH [ pancholi chirag ]
35/130
COMPETITIVE RIVELRY
Tata 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 iodinecontent 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 saltmanufacturing 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 FlowSalt. Nirma has the advantage of a well-established distribution
network of grocery stores (where its soap anddetergent brands are
typically sold). With its strategy of competitive pricing, the company
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
SKPIMCS 35
7/31/2019 NIRMASHUDH [ pancholi chirag ]
36/130
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.
COMPETITIVE ANALYSIS
The company, who wants to be the market leader in the edible salt
segment, must know their competitor from the bottom. Here we have
tired 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 us 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
SKPIMCS 36
7/31/2019 NIRMASHUDH [ pancholi chirag ]
37/130
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 the Desh 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
SKPIMCS 37
7/31/2019 NIRMASHUDH [ pancholi chirag ]
38/130
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.
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 "goodfor 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 is partly 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 been introspecting on the concept for over a year now. It
involves, in addition to iodizing the salt, a reduction of around 25 per
SKPIMCS 38
7/31/2019 NIRMASHUDH [ pancholi chirag ]
39/130
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 Saffola-
conscious 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. Thecompany 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 with the 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 Cook in the
staple food categories of salt and atta. With both Captain Cook as
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
SKPIMCS 39
7/31/2019 NIRMASHUDH [ pancholi chirag ]
40/130
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.
KUNVAR 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
SKPIMCS 40
7/31/2019 NIRMASHUDH [ pancholi chirag ]
41/130
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 logistics management, 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,
SKPIMCS 41
7/31/2019 NIRMASHUDH [ pancholi chirag ]
42/130
Tara, Haathi, Sagar, Ambica, Shagun, Umiya etc. they are major
threat to the edible salt industry, which must be overcome.
PROMOTIONAL CAMPAIGN INEDIBLE SALT INDUSTRY
A 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 Captain Cooks claims. Asmore 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 inthe 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
SKPIMCS 42
7/31/2019 NIRMASHUDH [ pancholi chirag ]
43/130
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 brandedsalt market has changed considerably. There is a new entrance in the
market -- Marico Industries Limited -, which launched two variants 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
`adding value' and hard selling ingredients in the branded
commodities market.
While Tata salt changed its positioning to `vacuum evaporated ' from
`iodized salt' a few months ago, the product ingredient `iodine 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
SKPIMCS 43
7/31/2019 NIRMASHUDH [ pancholi chirag ]
44/130
the good old salt, which is turning out to become the bone of
contention between 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 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.
SKPIMCS 44
7/31/2019 NIRMASHUDH [ pancholi chirag ]
45/130
SKPIMCS 45
7/31/2019 NIRMASHUDH [ pancholi chirag ]
46/130
INTRODUCTION
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."
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.
SKPIMCS 46
7/31/2019 NIRMASHUDH [ pancholi chirag ]
47/130
EVOLUTION
Shri Karshanbhai, from a chemist with Gujarat Government'sdepartment of mining & Geology became the owner of the market
leader in detergent business. His business vision & ability to
understand what consumer 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-lightingactivity 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.
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 be
SKPIMCS 47
7/31/2019 NIRMASHUDH [ pancholi chirag ]
48/130
promptly 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 his office 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 servicemanager 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.
SKPIMCS 48
7/31/2019 NIRMASHUDH [ pancholi chirag ]
49/130
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 paid of 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 powder market share in the western region anddislodged 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. Theyavoided 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 from their 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 thestory 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
SKPIMCS 49
7/31/2019 NIRMASHUDH [ pancholi chirag ]
50/130
anywhere in the world does one company sell much detergent less
than one brand name.
PRODUCT LIST
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 clean
BATHING SOAPS:
Nirma beauty soap
Nirma bath soap (carbolic)
Nirma premium soap
Nirma lime fresh soap
Nima rose
Nima lime
Nima winner
Nima sandal
SKPIMCS 50
7/31/2019 NIRMASHUDH [ pancholi chirag ]
51/130
Nirma rose
Nima herbal
Nirma herblina
OTHER PRODUCTS:
Nirma beauty shampoo
Nirma shikakai
Nirma toothpaste
Nirma shudh iodized free flow salt
INDUSTRIAL PRODUCTS:
Sulphuric acid
Linear alkyl benzene
Glycerin
Fatty acids
Soda ash
MANUFACTUIRNG PLANTS:
Mehsana Gujarat
Ahmedabad Gujarat
Bhavnagar Gujarat
Rajkot Gujarat
Dhar Madhay Pradesh
Kanpur Uttar Pradesh
SKPIMCS 51
7/31/2019 NIRMASHUDH [ pancholi chirag ]
52/130
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.
SKPIMCS 52
7/31/2019 NIRMASHUDH [ pancholi chirag ]
53/130
MARKETING STRATEGY
"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:
L A B O R
P R O D U
P O T E N T
S U R V
R E S E A R
2. MIS:
In this step they collect details about competitors
product.
SKPIMCS 53
7/31/2019 NIRMASHUDH [ pancholi chirag ]
54/130
7/31/2019 NIRMASHUDH [ pancholi chirag ]
55/130
6 . S E G
5 . D
4 . S U R V E Y ( T H E Y S U R V E Y T
3 . M I S D E P A R T M E N
2 . N E W P R O D U C T L
1 . A C C O R D I N G T O T H E I R C
PRICING POLICIES
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:
MIS
First 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.
SKPIMCS 55
7/31/2019 NIRMASHUDH [ pancholi chirag ]
56/130
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.
Company wants to maximize its profit then unit established higher
policy. The company wants to cover the larger part of the market and
for that the company may establish negligible profit policies for its
different products.
CHANNEL OF DISTRIBUTION
The channel of distribution will play an important role for the
company that are operating their business in the edible salt market
because people will buy only that product which will be available at
the purchase outlet. The level of brand switching is high here. Thus
channel of distribution will play an important role for effective reach
to the end consumer.
FACTORY
AGENTS
DEPOTS
RETAILERS
SKPIMCS 56
7/31/2019 NIRMASHUDH [ pancholi chirag ]
57/130
WHOLESELLER
CONSUMERS
The other channel of distribution is as follows:
COMPANY
STOCKPOINT
DISTRIBUTORS
RETAILERS\WHOLESALER
CONSUMER
SALES PROMOTION
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 PROMOTION
PROMOTIONAL EXPENCES
NIRMA does promotional expenses as under:
TOTAL PROMOTIONAL EXPENSE
SKPIMCS 57
7/31/2019 NIRMASHUDH [ pancholi chirag ]
58/130
7/31/2019 NIRMASHUDH [ pancholi chirag ]
59/130
Strong Brand equity. Nirma is an Rs.17 billion-umbrella brand
offering consumers a broad portfolio 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 or intermediates 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.
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.
SKPIMCS 59
7/31/2019 NIRMASHUDH [ pancholi chirag ]
60/130
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.
SKPIMCS 60
7/31/2019 NIRMASHUDH [ pancholi chirag ]
61/130
AWARENESS ABOUT THE BENEFITS OF THE IODIZED EDIBLE
SALT
There are people who will consider the value of iodine in the edible
first because iodine is a necessary requirement of a body and it will
also helpful in prevailing some daisies. 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.
CITY RESPONDENT
PERCENTAGE
YES NO
BHAVNAGAR 108 (90) 83.33% (18) 16.67%PORBANDAR 50 (44) 86% (06) 14%
GANDHINAGAR 50 (45) 90% (05) 10%
SKPIMCS 61
7/31/2019 NIRMASHUDH [ pancholi chirag ]
62/130
RAJKOT 100 (92) 92% (08) 8%SATELLITE 29 (27) 93.10% (02) 9.90%BAPUNAGAR 30 (22) 73.33% (08) 26.67%KHANPUR 30 (20) 66.67% (10) 33.33%
NARODA 32 (28) 87.50% (04) 12.50%VEJALPUR 30 (26) 86.66% (04) 13.34%VADAJ 41 (27) 65.85% (14) 34.15%KALOL 40 (24) 60% (16) 40%
TOTAL 540 (449) 83.15% (91) 16.85%
AWARENESS OF IODIZED SALT
16.85%
83.15%
YES
NO
Thus the overall analysis will suggest that there is 83.15% (449)
customers of the edible salt industry are aware about benefits of the
iodized salt while 16.85% (91) customers are not aware about the
benefits about the benefits of the iodized salt. So we can comment
that the awareness regarding the use of iodized salt is more than
enough, which will benefit the overall health safety of customers.
SKPIMCS 62
7/31/2019 NIRMASHUDH [ pancholi chirag ]
63/130
BRANDS KNOWN BY THE EDIBLE SALT USERS
(In Percentage Only)
Aba
d
Rajkot Bnaga
r
Pbande
r
Kalol Ggar
TATA 30 37 31 30 29 29NIRMA
SHUDH
22 15 19 25 20 20
ANN. 10 13 10 12 06 12
DANDI 25 26 24 23 24 21CAPTAIN
COOK
03 04 04 05 NIL 07
SAFFOLA 01 03 01 NIL NIL 01NATURE
FRESH
01 NIL NIL NIL NIL NIL
LOCAL 08 02 11 05 21 10
Tata is leading the way by having the highest percentage of brand
awareness. Both Dandi & Nirma Shudh Salt captures the second
position. That means that people are aware of the Nirma Shudh Salt
but they are not still trying to purchase this brand. People are still
wondering about whether to purchase the Nirma Salt or not. While
Annapurna has not been able to influence the market of Gujarat. The
local players are also playing a major role in the unbranded segment.
SKPIMCS 63
7/31/2019 NIRMASHUDH [ pancholi chirag ]
64/130
BRAND CHOICE OF THE EDIBLE SALT USERS
There are many brands of edible salt available in the market in which
the there are local, as well as national players exist. We have
analyzed the brand choice of the customers and the data we havecollected information every city wise, which is as follows:
PORBANDER (50)BRAND NAME PERCENTAGETATA (17) 34%DANDI (02) 04%
NIRMA SHUDH (12) 24%ANNAPURNA (07) 14%CAPTAIN COOK (05) 10%LAXMI (03) 06%TIPTOP (04) 08%
BHAVNAGAR (108)BRAND NAME PERCENTAGETATA (59) 54.65%DANDI (09) 08.33%NIRMA SHUDH (14) 12.96%ANNAPURNA (03) 00.78%CENTRAL SALT (04) 03.70%SAGAR (18) 16.66%NATURE FRESH (01) 00.92%
RAJKOT (100)
SKPIMCS 64
7/31/2019 NIRMASHUDH [ pancholi chirag ]
65/130
BRAND NAME PERCENTAGE
TATA (65) 65%DANDI (11) 11%NIRMA SHUDH (08) 08%
ANNAPURNA (03) 03%SAFFOLA (03) 03%TAJA (02) 02%LOOSE SALT (08) 08%
GANDHINAGAR (50)BRAND NAME PERCENTAGE
AMBICA (06) 12%ANNAPURNA (02) 04%CAPTAIN COOK (01) 02%
DANDI (04) 08%HARISH (01) 02%NAVJIVAN (02) 04%SAFFOLA (01) 02%NIRMA SHUDH (07) 14%TATA (26) 52%
KALOL (40)BRAND NAME PERCENTAGE
AMBICA (07) 17.50%ANNAPURNA (01) 02.50%HARISH (17) 42.50%NAVJIVAN (01) 02.50%NIRMA SHUDH (05) 12.50%TATA (09) 22.50%
AHMEDABAD (192)
BRAND
NAME
AREA NAMESatellite Bnagar Khanpur Naroda Vadaj Vejalpur
DANDI (03)
10.34%
(02)
06.67%
(02)
06.67%
(03)
09.38%
(04)
09.75%
(02)
06.66%KAMAL NIL NIL NIL NIL NIL (04)
13.36%NIRMA
SHUDH
(03)
10.34%
(08)
26.66%
(07)
23.33%
(07)
21.87%
(13)
31.71%
(11)
36.66%TARA NIL (06)
20%
(03)
10%
NIL NIL NIL
TATA (17) (12) (10) (16) (08) (11)
SKPIMCS 65
7/31/2019 NIRMASHUDH [ pancholi chirag ]
66/130
58.62% 40% 33.34% 50% 19.51% 36.66%UMIYA NIL (02)
06.67%
(01)
03.33%
NIL NIL NIL
LOOSE
SALT
(02)
06.91%
NIL (07)
23.33%
(04)
12.50%
(14)
34.15%
NIL
ANNA. (04)
13.79%
NIL NIL (02)
06.25%
(02)
04.88%
(02)
06.66%
From the above analysis, we can suggest that there is a good market
Recommended