Is Detergent Market Monopolistically Competitive?

Presenting by –TRISHA SINHA ROY(8629)

Indian Detergent Market Landscape

Detergent

Powder Bars Liquid

Detergent Market growing with a CAGR of 13.06% from last 5 yearsSource : India Detergent Market Overview 2016-2021 - Research and Markets

Indian Detergent Market Landscape

1959 •HUL launched Surf Excel.

1969 •Nirma was launched.

1987 •RSPL launched Ghari.

1988 •HUL launched Wheel.

1991 •P&G launched Ariel.

2000 •P&G launched Tide.Timeline:

Nature of the Monopolistically Competitive Market

• Product Differentiation• Large number of Firms• Freedom of Entry & Exit• Independent Behaviour• Industries & Product Groups• Falling Demand Curve• Selling Costs• Active Price Competition• Non-Price Competition

Showing Category-wise Detergent Brands & the Percentage of their Market Shares

Categories of Detergents

Detergent Brands

Market Share

Premium Ariel and Surf 15%

Mid-price Henko, Rin and Tide

40%

Popular Wheel, Ghari, Nirma & Mr.

White

45%

Source: https://www.ukessays.com

A Case Study of

A Brief History of Nirma• In 1969, Dr. Karsanbhai Patel started selling Nirma in Gujrat and went on to

sell it nationwide by 1985• Targeting poor consumers, mostly in rural areas • Low-cost manufacturing process, wide distribution network, special

packaging for daily purchasing & value pricing• Nirma had a 15.2% share of the detergents segment & an 8.2% of soaps in

April 2006• By June 2007, its market share had dipped to 13.5% in detergents & 6.74%

in soaps• Company’s share price also fell 24% • In December 2007,Nirma’s sales grew 4.3% year-on-year to Rs1,918.8 crore

while its net profit fell 15.2% to Rs241.38 crore• In the quarter ended 30th June, sales grew to Rs609.1 crore against

Rs525.5 crore in the same quarter last year, while the net profit fell 45% quarter-on-quarter to Rs41.1 crore

Source: https://marketingbyvijay.wordpress.com http://www.livemint.com/

HUL’s Change in Market strategy(Post 1995)

• Change in business model• Registered 20% growth in revenue/ annum• 25% growth in profits/annum• Market Capitalization grew by $12 billions• Adopted the bottom of the pyramid as a

Corporate Strategic Priority

Source: https://marketingbyvijay.wordpress.com

Downfall of Nirma

• Lack of Innovation• HUL was able to establish products in all

segments; Popular:Wheel , Mid-Priced: Rin and Premium:Surf

• Lack of Advertising• Lack of Product Differentiation• Lack of Price Increase

Change in packaging Over Years

Price CompetitionQuantity MRP of

Nirma ( in Rs.)

MRP of Ghari (in Rs.)

MRP of Wheel (in Rs.)

500gms 25 26 32

1Kg 43 49/50 49

Source: www.weareopen.in

Market Share of Detergents

17.3%

16.9%

13.5%

<6%

Brand-Wise

Ghari Wheel Tide Nirma

15%

40%

45%

Premium Mid-Price Popular

Category-Wise

Source: https://http://ankitmarketing.blogspot.in/

What Nirma could have done in order to prevent the downfall

• Compete on Quality• Strategic Positioning• Attractive Advertising• Co-operating Contributors• Weightage in Packaging

References• https://marketingbyvijay.wordpress.com/2014/07/07/nir

ma-vs-wheel/

• https://www.ukessays.com/essays/marketing/market-leader-in-soaps-and-detergents-industry-marketing-essay.php

• http://www.businesswire.com/news/home/20160314006184/en/India-Detergent-Market-Overview-2016-2021---Research

• http://indiatoday.intoday.in/story/hindustan-lever-limited-cuts-price-of-wheel-detergent-bar-draws-flak/1/307169.html

• http://www.livemint.com/Companies/qgXuYPLMoMFYV6jzJ942NP/Nirma-losing-froth-in-soaps-detergents-biz.html

• www.weareopen.in/Home-&-Bath-Care/Washing-Soap

Thank You