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BHAVSAR'S HERBAL SMOKING DEVICE

- NIRDOSH

Mr. Natvarlal Bhavsar, owner of the Maans Products (India), Ahmedabad was reviewing his six/seven years of experience of developing the product "NIRDOSH" (a unique non-tobacco smoking device) as well as the marketing strategy for popularizing "NirdoshJf. Nridosh a unique non-tobacco smo~ng device wc!s developed in 1982 by Maans Products, Ahmedabad. This was made from 14 herbs which were turned into granular form and rolled into tendu leaves in the shape of cigarette. These were then packed into a cigarette-type cardboard box which was in turn covered by cellophane wrapping. The Company:
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Maans product, Ahmedabad was a family owne"dproprietary organisation. Mr. Bhavsar, Senior, had been running a biri manufacturing and marketing enterprise for about two decades. This was a family business he had ~nherited. The total sales volume of this business was Rs.lO lakh a year. In 1980s his two sons joined the business after finishing their education, one of which had passed his B.Com examination before an year. In addition, another youngster, a distant cousin also worked for the firm. A third son., who appeared for 12th Board Examination did not perform that well to enter science stream and hence tleclded to assist in the business along with registering himself into "some vocational correspondence course in sales and marketing management Mr. Bhavsar Senior: He appeared to be in his early . fifties. He wore khadi dhoti kurta and a. white cap. He was the one who picked up the idea of manufacturing non-tobacco smoking device and spent most of his time worrying about it leaving the overseeing traditional business of :Biri manufacturing Jmarketing to the youngsters. He has been so deeply involved (missionary zeal) with developing and propagating this new product that he had not been able to think of anything else for the last couple of year~. Mr. Bhavsar had considerable social connections in both financial institutions as well with local political leaders.

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This case has been prepared by Prof. M.N. Vora. , Case material of the Indian Institute of Management, Ahmedabad is prepared as a basis for class discussion. Cases are not designed to present illustrations of either correct or incorrect handling of administrative problems. Copyright (C) 1990 by the Indian :{nstituteof Management, A'bad.

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Bhavsar the Younesters:

The young Bhavsar brothers respected father' s zeal and effort and tried their level best to be of help. However, at times, they have difference of opinion with Mr. Bhavsar, the senior about "Nirdosh"business activity. Assets of the Company: The major assets of the company was the manufacturingand storing premises for Biri. . Mr. Bhavsar owned "premiseswhere in 30-40 workers were provided sitting accommodationand other facilities for rolling Biris as well as Nirdosh. He had a large storage area for the raw material and finished goods. A part of the area was used for drying of raw material and other such operations. Nearly all of his operations were manual and hence no machinery was involved. Only for development of Nirdosh that attempt was made to develop manufacturingmachine. However, finally he has machines and equipment valued for about Rs. 10000 only The other major asset of the company was the shop in. the Gheekanta road (in the heart of the city); Ahmedabad. The shop was about 1O-12.feetwide and about 24 to 28 feet (deep). Part of back area was converted into a kind to open cabin with glass partition. Mr. Bhavsar and his sons owned two scooters (two wheelers) for moving around form factory to shop as well as going around the market. The distance between factory premises and shop was about two kilometers only. The shop furniture consisted of usual show case, see through glass cupboard, sitting arrangementswith Gaddi and low level wooden bench for customers and visitors to sit. In the partitioned cabin, there was a chair, a table, wooden shelves wherein box files, books of accounts etc, were kept. in addition to a table fan. From his shop not only he sold Biris and Nirdosh but also loose tea etc. However, Tea and other products accounted for very small proportion of his turnover. The Product Idea - The Beeinnine: The owner of Maans Products got interested in developing an ayurvedic herbal non-tobacco smoking .device in late 1970s, when he was asked by some Vaidyas to roll Ayurvedic material mix in the form of Beedi for their patients. He thought that this kind of activity could be an interestingbusiness opportunity.He examined well known and respected books by Ayurvedic experts (e.g., Charak) and identified specific herbs recommended for Dhumpan (1.)* He started experimenting to prepare a herbal mix to be rolled 2

.. in the Tendu leaf (used for Biri making) and test/smoke it. Fmally he came out with a good mix of some 14 herbs which was first tried in powder form and

then turned into granular form with the help of some special processes and machines and rolled into herbal beedi. Later on he added a filter at the end and rolled it into Tendu leaf but in the shape of a cigarette. He also realised that the same mix of herbs could also be presented in other pr~uct forms if necessary. * (1) Dhumpan was a concept described in the old scriptures. This related to inhaling of smoke arising out of Yagna Ahutis. It is therefore, a smoke emanating from valuable herbs. While Dhumrapan refers to inhaling of smoke of tobacco, smoking of cigarettes or beedis is considered as &CDhumrapan". Product Development: Mr. Bhavsar went through identifying aDd resolving several problems for developing &CNirdosh"nto p~rfect product in the last seven/eight ye.ars. The i problems related to raw material (herbs) procurement and converting the raw material into rollable form. Selection and procurement of Filter, selection and development of wrapper material in which herbal mix could be rolled (or filled), development of the cardboard pack, the instruction material insert, the brand name and so on. Exhibit-I gives a detailed write up on this

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developmentaleffort.
Manufacturine

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and Pack!n2 :

Rolling of Nirdosh is carried out manually. Of course special care is taken. The workers work under specially created hygienic conditions. Before they start rolling they were supposed to clean their hands with soap and water and wipe them with clean towels. Only a selected set of workers were allowed to work on Nirdosh. Mr. Bhaysar tried to use a mechanical process. He employed an engineer to develop a special machine with the help of inputs and advice from technical institutions.. Eight to ten months of effort and expenditure of Rs.60,00Q was incurred on this experiment in 1982-83 which was finally given up. Mr. Bhavsar then tried to explore possibility of buying cigarette making machinery. He enquired throughout the world to locate lowest cost machine.
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Most of the cigarettemaking equipment was high speed, high volume and very high investment affair..Nirdosh business really did not require such high speed high volume machines. Mr. Bhavsar naturally was not in a position to invest Rs.70 to 80 lakhs in machines. He came across old unused machines lying with a cigarette manufacturer in India, who was ready to dispose of it at very low prices. But he was not ready to promise to put these machines into working condition before sale and Mr. Bhavsar knew that he cannot arrange to put these in working order without considerable technical help. Therefore the matter was kept in abeyance. In early 1990, he has. again given this task to an engineer in Bombay, who is trying to make an appropriate machine.

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Promoting "Nirdosh" in the Initial Years : Mr. Bhavsar distributed free sample of these smoking devices to friends. relatives and acquaintances for testing and to get a feedback on its effect in relieving some ailments. He also supplied free samples to various well known Vaidyas, Allopathic doctors, Cancer Research Institutes, Medical Officers, Tata Institute of Fundamental Research, well known personalities like Film Star Ashok Kumar and some others for their opinions. He also obtained laboratory test reports on smok~ analysts etc. He received positive feedback about the beneficial effect of smoking Nirdosh in curing certain ailments like cold, cough, fever, asthma, tonsillitis, premature. graying- of hair, insomDia, toothaches, weak gums, bad odour, gastric problems etc. An appropriate pack insert was prepared (product literature) and Inserted in each pack. Exhibit-2 gives a copy of the pack insert. Market Opportunity for Nirdosh : The market opportunity for "Nirdosh" depended upon ..yhat"benefits" it wants to address itself to. If Mr. Bhavsar wants to target it for the major purpose of helping smokers of tobacco devices (cigarette and biri) to stop smoking, the market was very very large. One of his friends in a market research agency gave Mr. Bhavsar lot of information about cigarette and biri market and marketing practices of manufacturers in these industries. These are reproduced in Exhibit-ill Table 1 to 11. In case he wants to present it as a health remedy, the market opportunity would be significantly different. Exhibit IV Table 1,2 & 3 give information about this 'opportunity.
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Marketing and promoting Nirdosh : (A) Sales and D,istribution Arrangements: Since introduction Nirdosh was being distributed through (1) One main outlet in Ahmedabad, (2) sent to ordering parties in various towns and cities of India through VPP, (3) sent to some reseUers in other towns .through VPP. The sales of Nirdosh have been fluctuating around Rs.1.5 lakhs an year. In 1983 the sales was Rs.1.2 lakhs and in 1986 it was Rs.1.4 lakhs. A large proportion of sales was to people who were biri I cigarette smokers and were using Nirdosh to get rid of their smoking habit. The consumer paid Rs.2.50 for a pack of Nirdosh of 10 sticks. To reseUers the tenns offered in 1984 are reproduced in Exhibit-IV. Off and an he used to get enquiries from parties in several cities to take dealership stockistship etc. as well as for obtaining the product. In 1986 Mr. Bhavsar introduced certain quantity discount scheme to the reseUers e'-g., he will give 10% packs free' on large orders. If 400 packets are ordered 440 packets are sent charging the same price. " ,

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In 1989 there were two changes introduced.One the pack was redesigned and. the price was revised to Rs. 5.00 per pack of 10 sticks (consumer price). Second the youngest son, who joined the business part time, was asked to do door to door selling of Nirdosh to offices. He used to visit various offices in Ahmedabad explain and deD?-0nstrate Nirdosh. He had a folder with all the certificates from Vaidyas, Doctors, Drug authorities, Cine Star (Ashok Kumar) and other important personalities to show to the potential customer. He also requested them to test smoke a Nirdosh stick. In the second month of his promotional effort he reported Very favourable response of selling on an average 50 packs a day. (B) Publicity:. Because of his. missionary effort and educatirig important individuals about benefits of "Nirdosh" Mr. Bhavsar obtained lot of 'free publicity in terms of newspapers and magazines writing articles and news about this wonderful nontobacco smoking, device. He was also asked to write up articles for some magazines. Mr. Bhavsar had made it a point to identify and join hands with stop smoking voluntary organisations (or voluntary health crusaders). He attended the meetings, discussions and lectures at various places and gave free samples of Nirdosh as well as explained the health benefits of the product. Mr. Bhavsar spent at times on press advertising' wherever he happened to launch the product iri specific .market center (towns). This would have costed Rs.1ooo to 1500 for a small introductory ad. Over all these years Mr. Bhavsar spent about Rs.12,OOOon such advertising. The 1986 >advertising rates are presented in Exhibit-VI . (C) Sales: Mr. Bhavsar kept a record of sales through VPP. He had an impression that part of his sales through VPP was to the same individuals at same addresses (repeat buying). Even in tenns of his cash sales at tIis shop he thought that people who had used "Nirdosh" in past were themselves through their friends making purchases at his shop. At times individuals came searching for his shop for buying Nirdosh. Upto 1984, he.used to roll Nirdosh in biri form and packed 25 sticks in the conical fonn of a pack (similar to bin pack). From 1984 onwards he discontinued biri form but made the product in cigarette type of fonn with filter first selling it at Rs.2.50 for the pack of 10 and in 1989 selling it at Rs.S.OOper pack of 10. His sales between 1984-85 to 1987-88 ranged between ,1.2 to 1.5 Iakhs of rupees or about 60000 packs a year or 5000 packs a month. In 1989, however, he sold about 8000 packs a month or nearly Rs.5 lakh worth of Nirdosh a year.

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Costs. and Financial Resources : Cost of making NIRDOSH in 1987 is presented in Exhibit

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Mr. Bhavsar being a small time operator had not had large amount of internal resources to invest in "Nirdosh" project He had already spent about Rs.l.50 lakhs on various tasks - developing a machine for rolling and; packing. granulating machine, promotional expenditure in terms of small adveqisements etc. in specific markets. giving free samples to various institutions and individupls attending some seminars on self help in the health field and distributing Nirdosh prom