Bhavsars Herbal Smoking Device- Nirdosh

Introduction Maans products, Ahmedabad was a bidi manufacturing unit run by Mr. Bhavsar, a local businessman, who had been running the business successfully for over 2 decades and was supported by his two sons who joined their family business. The bidi business was a flourishing business with a yearly revenue of around 10Lacs. Mr Bhavsar decided to diversify his business and enter the line of producing herbal cigarettes called Nirdosh. The idea struck Mr Bhavsar when he was contacted by a group of vaidyas to roll special bidis for them which, instead of tobacco, contained herbs and other natural things and unlike bidi and cigarettes were not harmful to the consumer. Mr Bhavsar realised that there existed no such product in the market and after successfully identifying the gap, he spent six to seven years into the development of these herbal smoking cigarettes which he aptly named Nirdosh. Mr Bhavsar faced several hurdles during the course of the development of this product and later on in identifying the correct sector to target for his product and marketing it to the segment of consumers who would be interested in buying his products. Entering this market of hybrid cigarettes, Mr Bhavsar faced a lot of competition in positioning his product from the bigwigs in the markets such as ITC, National Tobacco, Godrey Philips, Golden Tobacco, VST. Mr Bhavsar lacked the resources these companies possessed and hence, as a result could not establish a proper distribution network and hence was not able to generate enough revenues. In the analysis below are pointers on how Mr Bhavsar went about with the Development and distribution of his product, the challenges he faced and solution to help solve those challenges.

Product Development Mr Bhavsar spent six to seven years on the development of his herbal smoking devices. This process involved: 1) Identification of the herbs that could be used for this, their continuous procurement, ensuring that there were no ill effects of the herbs he used. Finally he managed to come up with a mixture of 14 herbs that he felt could be used to manufacture Nirdosh. 2) Deciding how to roll i.e. like a bidi or like a cigarette. Initially Mr Bhavsar decided to proceed with manufacturing it like a bidi as he had skilled manpower for the same but on testing it was found that the smoker would end up inhaling some part of the powder. As a result he decided to proceed with the usage of a filter which would require it to be rolled like a cigarette and not a bidi. He tried to procure machinery

for the same which would speed up the process but he couldnt as it required a lot of capex. 3) After this, he had to spend a considerable time researching on the paper he could use on his cigarette as the herbs would leave a stain on the normal cigarette paper. He identified special handmade paper for this which would not be discoloured on smoking. 4) Following this he proceeded to deciding the Packaging of the product which was done in rectangular boxes, similar to cigarettes. These were wrapped with cellophane paper and had an insert highlighting the advantages of smoking Nirdosh.

After the product development, lets now proceed to the basics of Marketing his product beginning with Segmentation-Targeting-Positioning and the Marketing Mix for the implementation of his products. Segmentation-Targeting-Positioning Segmentation: Exhibit III Table 7 shows that the cigarette smoking population can be divided into different segments based on the age group, education and occupation. 1) Below the age of 35 or greater. 2) Whether they have a manual labour job, Small Traders, White Collar or Others. 3) Whether they have high school education or not. The study suggested that in India there is a major market of Bidi and Low cost cigarette smokers who are generally manual labours. The other segment that exists is of young working people below the age of 35 who belong to the category of small traders or white collar professionals. The third segment comprises of the more mature consumers over the age of 40 who are white collar professionals and prefer cigarettes such as Wills or India Kings which are priced high. Targeting: Mr. Bhavsars idea was to pitch it to people who wished to quit smoking as such he did not decide on a segment with much clarity. Initially had he gone ahead with the idea of rolling it as a bidi he wouldnt have been able to tap half the market he did becaus e people who are in the habit of smoking cigarettes would not switch to bidis even though with all the health benefits it promised. Also the bidi smokers comprised majorly of a class of manual labourers who would understand the health benefit of the herbal smoking device and thus repeat purchase would be very low. Also, for them smoking was a means of relaxation and a way of living therefore as such they would not be very open to the idea of quitting smoking. As he ventured into cigarettes, he wished to target people who wished to quit smoking, but a large number of the smoking population was below the age of 35 and thus relatively young. At such most people are not so concerned about the implications of smoking and there is no urgency as such to quit smoking. Therefore, there would be not

many cases of repeat purchases here as well. The major market that Mr. Bhavsar should have looked to focus on was the 40+ age group who are well educated and are already spending upto 1 to 2 Rs for a stick of cigarette. Such population would be more health conscious as they hit higher middle age and would be more open to a product which would help them quit along with health benefits. The product would save them from the extreme measures people take to quit smoking. Thus we see that one fault that Mr. Bhavsar did was not to segment and target the population with more clarity and going ahead with a very broad classification Positioning: A challenge that Mr. Bhavsar faced was the positioning of his product Nirdosh in the market. He tried to propose it as a mix of a healthy smoking device which could cure common ailments and as a product that could help people to quit smoking. Within this mix the clarity of how he wanted the consumer to perceive the product was lost. Given the fact that Nirdosh had health benefits and could cure common ailments, it was not enough to get people to start smoking. People who did not smoke would not prefer Nirdosh at all. Mr Bhavsar should have pitched his product as a herbal smoking device which would help quit smoking as it still gave the pleasure of smoking and would not be harmful as it was herbal. This would have created no doubt in the minds of the customers regarding the product and would have hit the target audience directly instead of the marketing strategy getting diluted. Marketing Mix-Marketing his Product Product Development: The same has already been discussed in detail in the beginning of the case study. Promotion: Mr Bhavsar employed various means of promoting Nirdosh. One of things that he did which went greatly in his favour and earned him the credibility he needed was that he got certification from different Ayurvedic practitioners, doctors and celebrities such as Ashok Kumar and he inserted that in a pack of Nirdosh. This ensured that the core benefits of the product did not go unnoticed. Mr Bhavsar, owing to the uniqueness of his idea, got publicity from various sources such as magazines and newspapers . Mr Bhavsar could have done a few things differently though. As clear from the exhibit provided a majority of the smoking population which belonged to the white collar class had a habit of reading newspapers. He could have invested more in newspaper advertisements and distributing pamphlets through newspapers which would have helped in spreading his product. Mr Bhavsar could have also approached the Radio for the advertisements are those are relatively cheaper.

One things that his campaign lacked was a factor that people could relate with, thus he needed a strong advertising campaign with a tagline. He could have also gone for putting up small stalls in shopping complexes or in front of big shops where he could educate people about the benefits of the product and distribute samples for the same. The door to door selling should have been strengthened and he could have employed more people for the same as this would have helped in establishing a customer base atleast in Ahmedabad. He could explore opportunities of a tie up with rehab centres or even the Ministry of health as they too focus on reducing cigarette smoking. This could help him get access to a good distribution channel as well. Pricing: By the end of the 1980s Mr Bhavsar priced his Nirdosh at Rs 5 a packet which meant 50 paise per stick. This is comparable with the prices of the already existing big brands of cigarettes which have their own loyal customers. Mr Bhavsar still had not completely reached out to those buyers and thus that segment of buyers who purchased the slightly costlier cigarettes because his means of promotion were very modest and the class that were initially his customers wouldnt be willing to pay the extra price. He could have gone about increasing the price a little slowly instead of just doubling it one go as this could potentially lead to a significant drop in sales and such sudden price surges are generally unwelcome. Place: Given the fact that he had a unique product, Mr Bhavsar still could not reach out to a lot of people because of a weak distribution network. I n order to increase his revenues he should look at opening small Nirdosh Outlets which would sell his products and also educate the people about its benefits at the same time. He should look for retailers in different areas and establish relationships with them and spread his network slowly by providing them support in spreading the brand Nirdosh in their cities and thereby slowly increasing volumes. He should continue exploring opportunities abroad as there it would be a completely different product giving him the power to price accordingly as well.

Thus we observe that even though Mr Bhavsar has a unique product that has a market and a potential to sell, there are faults in his marketing strategy starting from segmentation to the marketing mix. If he goes back and revisits his marketing strategy he can tap the untapped potential of Nirdosh Herbal Smoking Device.