Nirma vs HUL

Until about twenty years ago, the rural market of India was considered a
homogenous mass. The decade of 1980s was a significant one for Hindustan Lever Ltd. (Now HUL), when the giant and undisputed market leader in detergents (Surf) in India suffered significant losses at the hands of a new and small firm, Nirma Chemicals.

In 1969, Karsanbhai Patel, a chemist at the Gujarat Government's Department of Mining and Geology manufactured phosphate free Synthetic Detergent Powder, and started selling it locally. The new yellow powder was priced at Rs. 3.50 per kg, at a time when HLL’s Surf was priced at Rs 15. Soon, there was a huge demand for Nirma in Ruppur (Gujarat), Patel’s hometown. He started packing the formulation in a 10x10ft room in his house. Patel named the powder as Nirma, after his daughter Nirupama. Patel was able to sell about 15-20 packets a day on his way to the office on bicycle, some 15 km away. By 1985, Nirma washing powder had become one of the most popular, household detergents in many parts of the country.

Nirma was the lowest- priced branded washing powder available in grocery stores. The middle-class housewife was happy as she could now choose a lower-priced washing powder against Surf, which was beyond her budget. Nirma also had an impact on upper-middle-class and higher income families, who chose Nirma for washing their inexpensive clothes.

Around 1984, HLL decided to take a fresh look at the market. In order to counter attack Nirma, HLL launched Sunlight (yellow), Wheel (green) and Rin (blue) detergent powders for different market segments. This strategy of segmenting the market helped HLL win back part of its lost market.