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How Ghadi Detergent Killed Nirma RSPL Success Story | Muralidhar Gyanchandani | k-b-studio
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1 year ago
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00:00
Ghari Detergent Powder and Cake
00:02
Use it first, then believe it.
00:06
Friends, everyone knows this tagline of Ghari Detergent.
00:10
But when this brand was started,
00:12
the company didn't have enough money to do its advertisement.
00:17
That's why two brothers gathered their courage
00:19
and started selling it on foot or by cycle.
00:23
But when Ghari Detergent came to the market,
00:25
it was facing Nirma on one side,
00:28
and Hindustan Unilever on the other side.
00:34
But what did Ghari do?
00:36
It became one of the largest detergent brands in India.
00:39
Let's see what strategies this company adopted
00:42
and how much struggle it faced.
00:47
If we look at the history of detergent,
00:50
it started at the time of World War 2.
00:54
But it was far away from the reach of Indians.
00:57
But after 10 years of independence,
00:59
in 1957, a company called Swastik Oil Mills
01:03
started making synthetic detergents.
01:05
And this is how it started in India,
01:08
but still it was able to make its place in very few houses.
01:11
However, when Hindustan Unilever launched
01:14
its famous surfacer in India in 1969,
01:17
it was advertised very quickly.
01:19
Because of which detergent powder
01:21
started becoming popular among people.
01:24
But yes, India's population was still poor,
01:27
that's why surfacers were only targeted
01:29
to elite class families.
01:31
Because its detergents were so expensive
01:33
that middle or lower middle class
01:35
could not afford it.
01:37
And then understanding this problem,
01:39
Karsan Bhai Patel of Gujarat
01:41
launched Nirma Detergent,
01:43
which in just a few decades
01:45
became the most sold detergent brand in India.
01:48
Now friends, this success story of Nirma
01:50
reached two brothers named
01:52
Murlidhar and Vimal Kumar Gyanchandani of Kanpur.
01:55
And they were very inspired by this.
01:57
They thought that why not increase
01:59
the business of their father,
02:01
who used to make soap with glycerin at that time.
02:04
With this thought, in 1987,
02:06
these two brothers living in Shastrinagar, Kanpur
02:09
opened a small detergent factory
02:11
near Fajalganj Fire Station,
02:13
which was named
02:15
Shri Mahadev Shop Industry.
02:17
And then it was made in this factory only.
02:20
Now friends, this factory of Fajalganj
02:22
was small in size,
02:24
but the desire of these brothers
02:26
was very big.
02:28
That's why they joined the work
02:30
with a lot of hard work and passion.
02:32
However, their business
02:34
could not run for a long time
02:36
because in front of them,
02:38
there were many popular products
02:40
like Nirma and Hindustan Unilever wheel.
02:42
It was not at all easy to get ahead
02:44
of them.
02:46
However, they already had an idea
02:48
and kept convincing people
02:50
to buy detergent.
02:52
However, when there was no profit
02:54
even after a lot of efforts,
02:56
they understood that they have to do
02:58
something that other companies are not doing.
03:00
In that era, where most of the washing powder
03:02
was yellow or blue,
03:04
they decided to make white washing powder
03:06
and sell it in the market.
03:08
Apart from this, the Gyanchandani brothers
03:10
also gave a strong and
03:12
catchy tagline,
03:14
Use first, then believe.
03:16
People liked this tagline
03:18
and they thought that
03:20
when the company has so much trust
03:22
on its product,
03:24
then why not try it once.
03:26
And when people used it,
03:28
then people liked the white
03:30
and yellow color of this detergent.
03:32
Now, the trust of consumers
03:34
began to increase on this product
03:36
and gradually in the nearby areas
03:38
like Kanpur, the washing powder
03:40
and cake of the watch started becoming popular.
03:42
After its success in Kanpur,
03:44
they decided to distribute it in the whole of UP.
03:46
Because, obviously, this is the
03:48
biggest state of India.
03:50
Let me tell you that the total FMCG
03:52
sales had a 17% contribution
03:54
only from UP.
03:56
In such a situation, there could
03:58
not be a better market to experiment.
04:00
But, friends, apart from being good,
04:02
it was also a tough market
04:04
because the demand here was high
04:06
and the competition was also very high.
04:08
In such a situation, the watch took a
04:10
very big step to deal with this problem
04:12
because where other companies
04:14
were giving only 6% commission
04:16
to their distributors,
04:18
the watch increased it to 9%.
04:20
Now, the effect of more commission
04:22
was that the distributors
04:24
started preferring the watch
04:26
over the products of other companies.
04:28
And this was the reason that the
04:30
availability and visibility of the watch
04:32
increased a lot in the market
04:34
and now it was easily available
04:36
in every small shop in the neighborhood
04:38
due to which the company's sales
04:40
increased a lot.
04:42
But, friends, giving more commission
04:44
meant that the watch had to run
04:46
its business with a very low profit
04:48
and there was also a risk of
04:50
going into loss in front of them.
04:52
And friends, to deal with this
04:54
kind of problem, they started
04:56
making many cuts in expenses.
04:58
For example, the company started
05:00
making a small unit or depot
05:02
at a distance of 200 to 300 km
05:04
to reduce the cost of transportation
05:06
and also to give products to people
05:08
as soon as possible.
05:10
In this way, in a few years,
05:12
in UP, the watch detergent
05:14
became the most liked brand.
05:16
And then this success motivated
05:18
the company to enter
05:20
the neighboring states
05:22
after which Bihar, Madhya Pradesh
05:24
and many other states
05:26
started selling the watch.
05:28
Now, friends, due to UP,
05:30
the whole idea of тАЛтАЛthe market
05:32
was attached to the watch detergent
05:34
that's why slowly it started
05:36
spreading in the neighboring cities.
05:38
And then the watch achieved
05:40
500 crore sales by 2002
05:42
which was a great success
05:44
for the company.
05:46
After this, the company started
05:48
making many more products
05:50
and they started making
05:52
their presence strong in the FMCG market.
05:54
To integrate all its products
05:56
with each other,
05:58
in 2005, in the name of
06:00
Shri Mahadev Shop Industry,
06:02
Rohit Surfactants Private Limited
06:04
i.e. RSPL was created
06:06
so that their operations can be made easier.
06:08
Meanwhile, due to less innovations
06:10
and changing market trends,
06:12
Nirma was slowly losing its position
06:14
and the watch started getting
06:16
a lot of benefits and then
06:18
the watch started capturing Nirma's
06:20
market share.
06:22
In addition, the watch has also
06:24
launched its products in many other sectors
06:26
like in 2010, RSPL started a unit
06:28
in Haridwar from where hair oil,
06:30
shampoo, toothpaste, moisturizer,
06:32
shaving cream and liquid hand wash
06:34
were launched in the market.
06:36
In its next year,
06:38
in 2011, the watch followed
06:40
many brands like Wheel and Nirma
06:42
and became the largest player
06:44
in the Indian detergent market.
06:46
But how did all this happen?
06:48
Can a company be so successful
06:50
just by giving more commission
06:52
to distributors and making
06:54
white detergent in such a short time?
06:56
There is no answer at all
06:58
because the watch has adopted
07:00
a very important role in this.
07:02
First of all, it understood the
07:04
mind of consumers like
07:06
most of its customers were female housewives
07:08
who used to see more foam
07:10
with good quality and
07:12
used to use extra detergent
07:14
to get a lot of foam.
07:16
In this way, the watch understood
07:18
these insights and started advertising
07:20
itself that their detergent
07:22
gives the most foam.
07:24
Also, first use it, then believe it.
07:26
Due to this confident claim,
07:28
customers started getting curious
07:30
to try this new product.
07:32
But this tagline would have
07:34
died in some alley of Kanpur
07:36
decades ago if Gyan Chandani
07:38
had not given priority to
07:40
the advertisement of his products.
07:42
Today, you may see big stars
07:44
like Madhuri Dixit and Amitabh Bachchan
07:46
advertising the watch,
07:48
but in the early days,
07:50
the watch was struggling
07:52
and was trying to survive
07:54
by cutting expenses.
07:56
In this way, he could not
07:58
make a superstar a brand ambassador
08:00
and he did not have money
08:02
to run an ad campaign at a very high level.
08:04
But how can people
08:06
be aware of their products
08:08
without any advertisement?
08:10
For this, Gyan Chandani took
08:12
a very smart decision.
08:14
He painted a watch advertisement
08:16
on the exterior of a major train
08:18
in the North Indian states
08:20
like Pushpak Express and
08:22
Swarn Jayanti Express.
08:24
In addition to the exterior,
08:26
small posters were placed inside the box
08:28
which increased the brand visibility.
08:30
The company's target
08:32
was to keep its ad spend
08:34
very minimal and
08:36
spend only 2% of its sales
08:38
on advertisement.
08:40
To stay on this strategy,
08:42
Gyan Chandani kept his advertising
08:44
activities in-house
08:46
which saved him from
08:48
advertising agencies and
08:50
additional expenses on middlemen.
08:52
When Chandani wanted to
08:54
start his detergent brand,
08:56
he saw that it was
08:58
a premium and high-priced product
09:00
which was very expensive.
09:02
On the other hand, Nirma
09:04
was a cheaper alternative
09:06
for those who wanted to use
09:08
detergent but were not
09:10
ready to pay much for it.
09:12
As it was cheap,
09:14
many people thought that
09:16
Nirma is a low-quality product
09:18
and there was no option
09:20
which was better than Nirma
09:22
but it was also
09:24
not as expensive as Surf.
09:26
In this situation,
09:28
Gyan Chandani decided to enter
09:30
this segment and started
09:32
positioning his brand as
09:34
a better alternative to Nirma.
09:36
The company was very smart
09:38
in keeping the watch's price
09:40
and where Nirma was selling
09:42
its detergent at Rs 30 per kg,
09:44
the watch started selling
09:46
at Rs 35 per kg.
09:48
It was a risky decision
09:50
because Nirma was the biggest
09:52
competitor and market leader
09:54
of the watch and beating it
09:56
at such a high price was a
09:58
big challenge for the company.
10:00
But the watch kept its
10:02
quality confidence and
10:04
encouraged its consumers
10:06
through its advertising campaigns.
10:08
Gradually, people started
10:10
perceiving the watch as a
10:12
premium product.
10:14
When the company started
10:16
they didn't have enough money
10:18
to distribute their products
10:20
at a national level.
10:22
That's why they started with
10:24
a small goal and targeted
10:26
only the Kanpur market.
10:28
When the brand succeeded in Kanpur,
10:30
they focused on their home state
10:32
i.e. Uttar Pradesh.
10:34
After my success here,
10:36
the company had enough money
10:38
to be aggressive and
10:40
distribute their products
10:42
in remote areas.
10:44
They selected their neighboring states
10:46
like MP, Bihar, Punjab and Haryana
10:48
so that they can understand
10:50
the demand of other consumers
10:52
other than UP,
10:54
what kind of ad campaigns
10:56
they do there and how
10:58
their products can be
11:00
associated with their region.
11:02
For this, the watch started
11:04
many magic shows,
11:06
set up stalls in fairs,
11:08
showcased products in exhibitions
11:10
and worked on many such strategies
11:12
to connect with this brand.
11:14
And then it became
11:16
the most popular brand in the country.
11:18
That's why today,
11:20
only one watch is sold
11:22
out of all four detergent brands.
11:24
The management of the company
11:26
is entirely in the hands of the family.
11:28
Murali and Vimal Ganjandani
11:30
handle daily operations.
11:32
Vimal's son handles the marketing
11:34
and Murali's son is also
11:36
a special part of the company.
11:38
Their business is not only
11:40
in detergent, but also in the dairy sector.
11:42
And many of you
11:44
must be knowing
11:46
about their dairy brand Namaste India.
11:48
Apart from this,
11:50
in 1995, the company
11:52
also took a step in the manufacturing business
11:54
and established Lian Global
11:56
Pvt. Ltd.
11:58
And friends, this is the same Lian Global
12:00
whose Red Cheap Boots you wear with great interest.
12:02
Now if we look at the performance
12:04
of this time,
12:06
the watch detergent is doing very well
12:08
but it cannot be denied
12:10
that the competition in this segment
12:12
is very tough.
12:14
And the watch is not only being challenged
12:16
by big players like Surf or Arial,
12:18
but also by many regional brands
12:20
like Nirma, Fena, Mr. White.
12:22
So friends, the way
12:24
Nirma was inspired for watch detergent
12:26
in the beginning,
12:28
even today, keeping that in mind,
12:30
the watch should learn from Nirma's past mistakes
12:32
and take some strategic steps
12:34
to sustain its growth.
12:36
For example, the watch should invest
12:38
as much as possible in its R&D,
12:40
develop new products
12:42
and pay attention to improving
12:44
existing products so that
12:46
they can stay ahead in the market.
12:48
Also, it is very important for the watch
12:50
to understand the changing market demand
12:52
and consumer preference
12:54
otherwise it can also lag behind like Nirma.
12:56
Apart from this, there is one more thing
12:58
on which the watch should definitely work
13:00
and that is its distribution network.
13:02
Now you must be thinking
13:04
what is wrong in this?
13:06
Actually, the watch is a detergent brand
13:08
only a few states in the North side
13:10
know about this,
13:12
whereas the Southern state is still
13:14
completely unaware of this.
13:16
In this case, the watch should establish
13:18
its Pan India presence
13:20
so that it can get a bigger
13:22
consumer base.
13:24
And friends, if the watch adopts these strategies,
13:26
then it can maintain its current
13:28
successful legacy for a long time.
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