Indian Institute of Management, Indore

PGP-1, 2013-2015

Analysis of Case: Bhavsars Herbal Smoking Device - Nirdosh

(As a part of course Marketing I, PGP 2013-2015)

Submitted on August 22, 2013

Prepared by: Group 2, Section B Ajnas Hashim Arpit Kasture Bhavya Tiramdasu Nilay Biswas Rajasekaran C Shiksha R Singh Wazeem M A

Under the Guidance of Prof. Sabita Mahapatra Indian Institute of Management, Indore

INTRODUCTION Nirdosh is a unique non-tobacco smoking device developed in 1982 by Maans Products, Ahmedabad. Mr. Bhavsar is involved in developing and promoting this new product and scouting for opportunities to expand. OBJECTIVE To determine the feasibility of Nirdosh exploring International Market in comparison with Domestic market. VARIOUS POTENTIAL FOR NIRDOSH IN DOMESTIC MARKET Nirdosh as Help Currently we can market Nirdosh to smokers for following reasons: Unique product with no substitutes available currently People who start smoking because of peer pressure, to increase their cool quotient, eventually realize the ill effects of cigarettes and want to quit at some point of time. Nirdosh could be a viable alternative at this scenario that one can smoke and still not smoke in actuality The market available for cigarette industry is humongous and even a minor penetration into this huge market would translate into considerable sales figures Availability of a potentially untapped market that includes export market as well Market share analysis Number of cigarettes that were sold in 1985 - 9000 crores (Exhibit 3 - Table 2) Filter Cigarettes constitutes 46 % of total cigarettes sold (9000) = 4140 crores If we assume 10% want to quit smoking, the cigarette sale can potentially go down by 414 crores. Let us make one more assumption that 25% quit successfully. That leaves 75% for substitution which is 310.5 Cr cigarettes. Even if we can achieve a modest 1% market share, we are considering a sales volume of approximately 31-32 crore cigarettes. Given that the current sales figure is approximately 1 lakh bicets per year, the potential market seems to be too stiff a target to achieve. NIRDOSH AS HEALTH REMEDY Market potential through Doctors, Hospitals, Dispensaries No of registered doctors per lakh population under allopathic system of medicine: - 43.4 No of Hospitals in 1985 -7297 No of Dispensaries in 1985- 25808

Market potential through Pharmaceuticals and Ayurvedic Products Projected demand of allopathic Bulk drugs: -Rs 1033 crores Projected demand of Formulations: - Rs 4800 crores Market potential for cough drops: - Rs 12 crores Market potential for Balm: - Rs 20 crores Projected demand of Analgesic tablets: -Rs 10 crores Market potential for Ayurvedic products: - Rs 100 crores

Products that can be targeted by Nirdosh for ailments: 1. Anti asthmatic Drugs

Anti Asthmatic Drugs

8.00 6.00 4.00 2.00 0.00 Asthaline Asthalite Asthanol Asthma Reliever Nirdosh Retail Price

From the above chart following products can be targeted by Nirdosh: -

Medicine Asthaline Asthma Reliever 2. Cough medicines

Retailer Price 7.50 6.52

Cough Medicines
25 20 15 10 5 0

Retail Price

From the above chart following can be targeted by Nirdosh: Medicine Cough Lozenges(Tablets) Cough Mixture Retail Price 10.56 20.26

Thus when Nirdosh is presented as a health remedy, it has huge potential to expand its business in the Domestic market. Owing to its beneficial effect on persons suffering from various ailments it has the potential to target various products and can capture the market. It can also target doctors,

hospitals and dispensaries by personally meeting or visiting them which could prove to be a source for the sale of Nirdosh and expand its business. Promotion in Domestic Market Current Advertising of Nirdosh: Writing articles in Newspapers and Magazines, News about this unique innovation. Mr.Bhavsar attending stop smoking voluntary organizations By attending meetings, discussions, lectures at various places and gave free samples of Nirdosh Introductory ads(wherever he launched the product) cost him about Rs.12,000 Effective Advertising Strategies By Competitors First year of CHARMS launch: Rs.25 lakhs were spent on color inserts in newspapers, outdoor display in hoardings, Damix cultures was used for lifestyle advertising. Because of this advertising, the sales of charms moved up from 50 million in mid 1983 to 300 million by end of 1984. VST has been in the forefront of sponsoring significant proportion of its budget for sports and performing art events.

The government has put a ban on advertising of cigarettes on the TV. On radio also the industry decided not to advertise. Since NIRDOSH is a non-tobacco, it can gain over other markets by advertising through these mediums more Media Habit Analysis Assuming that the media habit of smokers remains the same over the decade, the following column chart shows the media habit of the smokers of specific brands. And from Exhibit III-4 and 8, it is significantly shown that people with high media habit are more inclined to smoking. Also advertising strategies of Mr.Bhavsar by writing articles and paid advertisements through newspapers and magazines will make Nirdosh stand in the market against the domestic competitors. In case, if Nirdosh is entering international market, it has to identify the competitor strategy and arrive at new concepts to find a new place for them in the international industry, which is very difficult in short term.

Media Habit of Smokers Of Specific Brands

120 100 80 60 40 20 0 Newspaper Magazine Cinema

Channels of Distribution Mostly the channel of distribution for the cigarette companies were retailers involving retail trade in food, beverages, tobacco and intoxicants, pan-bidi shops and other outlets. Major companies like ITC had distribution channels like wholesalers and retailers to penetrate deeper into all villages and towns. Similarly distribution channels used by Nirdosh were: One main outlet in Ahmadabad Ordering parties in various town and cities through VPP Resellers through VPP Door to door selling to offices

These strategies by Nirdosh can be emphasized and by bringing in new strategies to defend the competitors can help Nirdosh capture the market share in the industry. Since it is in domestic market, it is easier to connect the network of distribution channels for easier penetration. But, In case of International market, Nirdosh has to follow different strategies according to the location and demographics of that particular market to establish the market. And that is only possible if Nirdosh gets establishes in domestic market to back up for international market expansion. RECOMMENDATIONS Analysing the market share of Nirdosh as a help remedy for smokers and also in health sector, the potential is too enormous to achieve. It can also target doctors, hospitals and dispensaries by personally meeting or visiting them which could prove to be a source for the sale of Nirdosh and expand its business. From the advertising aspects, it can be understood that it can gain over other markets by advertising through TV and radio since NIRDOSH is a non-tobacco product. From the media habits of smokers we can infer that if Nirdosh enters international market, it has to identify a newer optimal strategy which could fit them in the international industry, which is very difficult in short term. Thus analyzing on the various aspects of Nirdosh in domestic market, we conclude that Nirdosh has huge potential here which should be explored first before going international.