..

,

.

BHAVSAR'S HERBAL SMOKING DEVICE -NIRDOSH

Mr. Natvarlal Bhavsar, owner of the Maans Products (India), Ahmedabad wasreviewing his six/seven years of experience of developing the product"NIRDOSH" (a unique non-tobacco smoking device) as well as the marketingstrategy for popularizing "NirdoshJf.

Nridosh a unique non-tobacco smo~ng device wc!s developed in 1982 byMaans Products, Ahmedabad. This was made from 14 herbs which were turnedinto granular form and rolled into tendu leaves in the shape of cigarette. Thesewere then packed into a cigarette-type cardboard box which was in turncovered by cellophane wrapping.

The Company: .r

Maans product, Ahmedabad was a family owne"dproprietary organisation. Mr.Bhavsar, Senior, had been running a biri manufacturing and marketingenterprise 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 twosons joined the business after finishing their education, one of which hadpassed 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 12thBoard Examination did not perform that well to enter science stream and hencetleclded to assist in the business along with registering himself into "somevocational 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-tobaccosmoking device and spent most of his time worrying about it leaving theoverseeing traditional business of :Biri manufacturing Jmarketing to theyoungsters. He has been so deeply involved (missionary zeal) with developingand propagating this new product that he had not been able to think ofanything else for the last couple of year~. Mr. Bhavsar had considerable socialconnections in both financial institutions as well with local political leaders.

. This case has been prepared by Prof. M.N. Vora.,

Case material of the Indian Institute of Management, Ahmedabad is preparedas a basis for class discussion. Cases are not designed to present illustrations ofeither correct or incorrect handling of administrative problems.

Copyright (C) 1990 by the Indian :{nstituteof Management, A'bad.

1

Bhavsar the Younesters:

The young Bhavsar brothers respected father' s zeal and effort and tried theirlevel best to be of help. However, at times, they have difference of opinionwith Mr. Bhavsar, the senior about "Nirdosh"business activity.

Assets of the Company:

The major assets of the company was the manufacturingand storing premisesfor Biri. . Mr. Bhavsar owned "premiseswhere in 30-40 workers were providedsitting 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 ofthe area was used for drying of raw material and other such operations.

Nearly all of his operationswere manual and hence no machinery wasinvolved. Only for developmentof Nirdosh that attempt was made to developmanufacturingmachine. However, finally he has machines and equipmentvalued for about Rs. 10000only

The other major asset of the company was the shop in. the Gheekanta road (inthe heart of the city); Ahmedabad.The shop was about 1O-12.feetwide andabout 24 to 28 feet (deep). Part of back area was converted into a kind to opencabin with glass partition.

Mr. Bhavsar and his sons owned two scooters (two wheelers) for movingaround form factory to shop as well as going around the market. The distancebetween 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 customersand visitors to sit. In the partitioned cabin, there was a chair, a table, woodenshelves wherein box files, books of accounts etc, were kept. in addition to atable fan. From his shop not only he sold Biris and Nirdosh but also loose teaetc. However,Tea and other products accountedfor very small proportion ofhis turnover.

The Product Idea - The Beeinnine:The owner of Maans Products got interested in developing an ayurvedic herbalnon-tobacco smoking .device in late 1970s,when he was asked by someVaidyas to roll Ayurvedic material mix in the form of Beedi for their patients.He thought that this kind of activitycould be an interestingbusinessopportunity.He examined well known and respected books by Ayurvedic experts (e.g.,Charak) and identified specific herbs recommended for Dhumpan (1.)* He startedexperimentingto prepare a herbal mix to be rolled

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in the Tendu leaf (used for Biri making) and test/smoke it. Fmally he came outwith a good mix of some 14 herbs which was first tried in powder form andthen 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 androlled it into Tendu leaf but in the shape of a cigarette. He also realised that thesame 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 toinhaling of smoke arising out of Yagna Ahutis. It is therefore, a smokeemanating from valuable herbs. While Dhumrapan refers to inhaling of smokeof tobacco, smoking of cigarettes or beedis is considered as &CDhumrapan".

Product Development:

Mr. Bhavsar went through identifying aDd resolving several problems fordeveloping &CNirdosh"into p~rfect product in the last seven/eight ye.ars. Theproblems related to raw material (herbs) procurement and converting the rawmaterial into rollable form. Selection and procurement of Filter, selection anddevelopment of wrapper material in which herbal mix could be rolled (orfilled), development of the cardboard pack, the instruction material insert, thebrand name and so on. Exhibit-I gives a detailed write up on thisdevelopmentaleffort. . - .

Manufacturine and Pack!n2 :

Rolling of Nirdosh is carried out manually. Of course special care is taken. Theworkers work under specially created hygienic conditions. Before they startrolling they were supposed to clean their hands with soap and water and wipethem with clean towels. Only a selected set of workers were allowed to workon Nirdosh. Mr. Bhaysar tried to use a mechanical process. He employed anengineer to develop a special machine with the help of inputs and advice fromtechnical institutions.. Eight to ten months of effort and expenditure ofRs.60,00Q was incurred on this experiment in 1982-83 which was finally givenup. Mr. Bhavsar then tried to explore possibility of buying cigarette makingmachinery. He enquired throughout the world to locate lowest cost machine.

. Most of the cigarettemakingequipment was high speed, high volume and veryhigh investment affair..Nirdosh business really did not require such high speedhigh volume machines. Mr. Bhavsar naturally was not in a position to investRs.70 to 80 lakhs in machines. He came across old unused machines lying witha cigarette manufacturer in India, who was ready to dispose of it at very lowprices. But he was not ready to promise to put these machines into workingcondition before sale and Mr. Bhavsar knew that he cannot arrange to put thesein working order without considerable technical help. Therefore the matter waskept in abeyance. In early 1990, he has. again given this task to an engineer inBombay, 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 inrelieving some ailments. He also supplied free samples to various well knownVaidyas, Allopathic doctors, Cancer Research Institutes, Medical Officers,Tata Institute of Fundamental Research, well known personalities like FilmStar Ashok Kumar and some others for their opinions. He also obtainedlaboratory test reports on smok~ analysts etc. He received positive feedbackabout the beneficial effect of smoking Nirdosh in curing certain ailments likecold, cough, fever, asthma, tonsillitis, premature. graying- of hair, insomDia,toothaches, weak gums, bad odour, gastric problems etc. An appropriate packinsert was prepared (product literature) and Inserted in each pack. Exhibit-2gives a copy of the pack insert.

Market Opportunity for Nirdosh :

The market opportunity for "Nirdosh" depended upon ..yhat"benefits" it wantsto address itself to. If Mr. Bhavsar wants to target it for the major purpose ofhelping smokers of tobacco devices (cigarette and biri) to stop smoking, themarket was very very large. One of his friends in a market research agencygave Mr. Bhavsar lot of information about cigarette and biri market andmarketing practices of manufacturers in these industries. These are reproducedin Exhibit-ill Table 1 to 11.In case he wants to present it as a health remedy, the market opportunity wouldbe significantly different. Exhibit IV Table 1,2 & 3 give information about this'opportunity. '

Marketing and promoting Nirdosh :

(A) Sales and D,istribution Arrangements:

Since introduction Nirdosh was being distributed through (1) One main outletin Ahmedabad, (2) sent to ordering parties in various towns and cities of Indiathrough VPP, (3) sent to some reseUers in other towns .through VPP. The salesof Nirdosh have been fluctuating around Rs.1.5 lakhs an year. In 1983 the saleswas Rs.1.2 lakhs and in 1986 it was Rs.1.4 lakhs. A large proportion of saleswas to people who were biri I cigarette smokers and were using Nirdosh to getrid of their smoking habit. The consumer paid Rs.2.50 for a pack of Nirdosh of10 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 takedealership stockistship etc. as well as for obtaining the product. In 1986 Mr.Bhavsar introduced certain quantity discount scheme to the reseUers e'-g., hewill give 10% packs free' on large orders. If 400 packets are ordered 440packets are sent charging the same price. " ,

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. In 1989there 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 dodoor to door selling of Nirdosh to offices. He used to visit various offices inAhmedabad explain and deD?-0nstrateNirdosh. He had a folder with all thecertificates from Vaidyas, Doctors, Drug authorities, Cine Star (Ashok Kumar)and other important personalities to show to the potential customer. He alsorequested them to test smoke a Nirdosh stick. In the second month of hispromotional effort he reported Very favourable response of selling on anaverage 50 packs a day. -

(B) Publicity:.

Because of his. missionary effort and educatirig important individuals aboutbenefits of "Nirdosh" Mr. Bhavsar obtained lot of 'free publicity in terms ofnewspapers and magazines writing articles and news about this wonderful non-tobacco smoking, device. He was also asked to write up articles for somemagazines.

Mr. Bhavsar had made it a point to identify and join hands with stop smokingvoluntary organisations (or voluntary health crusaders). He attended themeetings, discussions and lectures at various places and gave free samples ofNirdosh as well as explained the health benefits of the product.

Mr. Bhavsar spent at times on press advertising' wherever he happened tolaunch the product iri specific .market center (towns). This would have costedRs.1ooo to 1500 for a small introductory ad. Over all these years Mr. Bhavsarspent about Rs.12,OOOon such advertising. The 1986 >advertising rates arepresented in Exhibit-VI .

(C) Sales:Mr. Bhavsar kept a record of sales through VPP. He had an impression thatpart 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 thatpeople who had used "Nirdosh" in past were themselves through their friendsmaking purchases at his shop. At times individuals came searching for his shopfor buying Nirdosh. Upto 1984, he.used to roll Nirdosh in biri form and packed25 sticks in the conical fonn of a pack (similar to bin pack). From 1984onwards he discontinued biri form but made the product in cigarette type offonn with filter first selling it at Rs.2.50 for the pack of 10 and in 1989 sellingit at Rs.S.OOper pack of 10.

His sales between 1984-85 to 1987-88 ranged between ,1.2 to 1.5 Iakhs ofrupees 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 -vn

Mr. Bhavsar being a small time operator had not had large amount of internalresources to invest in "Nirdosh" project He had already spent about Rs.l.50lakhs on various tasks - developing a machine for rolling and; packing.granulating machine, promotional expenditure in terms of small adveqisementsetc. in specific markets. giving free samples to various institutions andindividupls attending some seminars on self help in the health field anddistributing Nirdosh prom<?tionalmaterial and sample; expenditure to visit andparticipate in antismoking clinical groups and giving free samples andmaterial, expenditure on various kind of laboratory tests and other tests.

Mr. Bhavsar was, however, quite confident' that many friends. financialinstitutions officers and local leaders will help in raising needed [mancialresources. They all thought it was a great idea and that inoney should beavailable for such a product and cause.

Exports Opportunity:

Mr. Bhavsar had been rec~iving enquiries from abroad about supply of"Nirdosh". He had sent "samples" to U.K. as well as U.S.A. parties. Theseparties were attempting to get approval of appropriate authorities in thosecountries. Mr. Bhavsar expected large orders from abroad once the formalitiesare carried out. ..

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6 .

BHAVSAR'S HERBAL SMOKING DEVICE - NIRDOSHExhibit - 1

PRODUCT DEVELOPMENT EFFORT

(a)Raw material-. .

Herbs being seasonal crops, availability round the year had to be 'arranged.Different herbs were grown in several parts of India and hence Mr. Bhavsarhad to develop a system of identifying where bes~raw material was available atreasonable prices. Humidity, time and seasons had impact on the raw material,HENCE system had to be developed for ensuring availability of appropriatequality and quantum of material. Of course, the present requirements were notvery large.

Conversion of herbal material from raw from to rollable form.' This requireddrying, shredding, grinding and granulating various material as well as th~mixing of 14 herbs.

(b)Filter

When the raw material was made into powder form and rolled, the smokerhappened to inhale a little of powder while a puff (material entering themouth). Hence Mr. Bhavsar decided to use a filter at one end to stop thematerial entering the mouth while taking a puff. But this required change in theprocess of rolling. His workers were skilled in terms of rolling biris. Now therolling has to be gone in a cylindrical form like cigarette because filteravailable were r7icUnlyfor cylindrical form.

(c)WrapperThe material content was rolled in the tendu leaf used for rolling biri. Forcylindrical form like a cigarette the operation of using tendu leaf was not thatconvenient However alternative would be to use 'Paper' as a wrapper likecigarette, This would become essential if machine wrapping was to be adopted.The white paper will have two problems one the paper when it bums has

some negative effect on smoker, the second Tor Nirdosh some of theherbs used had a moisture and colour which will come out on the surface of thewhite-paper after som~ time. This will spoil the appearance as well as give thefeeling of staleness. Mr. Bhavsar therefore tried to develop special colouredmedicinal paper which will not have that negative impact. For this he usedhand paper making facilitr available at Gandhi Ashram, Ahmedabad.

(d)Pack

First when Nirdosh was prepared. It was rolled in the bili form. Twenty fivesuch biris were aver wrapped by ordinary paper in a conical form. Howeverwhen sticks were made in cylindrical form, Mr. Bhavsar developed a'

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rectangular pack similar to ones used in the cigarette business. The pack wasthen again over wrapped by a cellophane paper similar to the one used ancigarettes or blades packs. Over a period of six years he changed his pack threetimes -significant changes in tenns of increasing the size or changing the colordesign on the rectangul:1I"box and the words printed on it Exhibit-I.! gives thepicture of the pack. .

(e}Pack Insert

Mr. Bhavsar decided .to insert in the pack an. instructions leaflet describing theNirdosh content, benefits and the method of usage, etc. This was similar toinsert material one would find in pharmaceutical formulation packs. Exhibit-ITgives list of instructionson this pack insert. .

(f) Brand Name

After cansidering various options "Nirdosh" was selected as the brand name.The meaning of "Nirdosh" is "innocent" without blemish".

(g) Print Content on the p~ck---

Not only brand name "Nirdosh" was to be printed, he had to decide as to/whatelse to be printed. Shpuld he call it biri or cigarette. Biri would be low prestigekind of word cigarette would convey harmfulness while this smoking devicewas to help people stop smoking tobacco cigarettes and biris. Finally the wordused was Bicets. This was coined by taking first two letter from biris andsomething from cigarette.

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BHAYSAR 'S HERBAL SMOKING DEVICE-NIRDOSHExhibit-I.I

,...81

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I

tC I

I

- II

NiknoSHHERBAL FlLTEA." ",.

BVr'mtUre,ffr;.et:?i06aaoJffit

NIROOSH SMOKING ISHEALTHY FOR HEALTH1111111111111111

ent:z:Jo-

t 'IIIIIent:Z:J

NIRDOSH0...

CD if HERBAL FILTER

"'" a- 1111"'."'."""E!. Bfi"rolllff Jfrrr

q;j(;&m1 &!r: I I , I "ii.

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NrRDOSH SMOI(IG IS Eoi

II NIRDOSH SMOY.INGISHEALTHYFOR HEAL1H

III . EHEJ\l1HY r('p HEAI,.TH":fL- - - - - * * '" -: 11111111

BHA VSAR 'S HERBAL SMOKING DEVICE-NIRDOSH

Exhibit :II

MAANS

PRODUCTS(INDIA)

2 Gheekanta Road.Ahmedabad.3 80 00 1Phone. 24733Phone"'NIRDOSH"Manufacturer of NIRDOSHMumbai Firm

Dear Friend,

We have pleasure to Inform you that we have placed in the market a new packet ofHerbal Filter NIRIDOSH with tried out Improved formula with better appealing taste.

Thousand of people have used NIRDOSHand have found its beneficial effects on heath.We hope, you will also get similar effect, on studying the results of its use to redress yourcertain health problems. We say this confidentiallywith a hope that you will convey yourexperience to your near and familiar persons and thus you will have a satisfaction of doing apieceful humanitarian service to your friends and acquaintances.

Our Company has carried out experiments for making NIRDOSH more and more usefulto serve the needs of different kinds of people Modifications have been made from time to timeand their results have been studied so that present preparation of NIRDOSH- will satisfypeople having different kinds of taste, temperament and health problems" It was a challengingtask to develop this products. Reports from tobacco smokers say that it has been foundbeneficial in cold, cough, headache, gas trouble and indigestion. .

Herbs having medicinalpropertieshave been used preparation of NIRDOSH viz.Tulsi, Sugandhvala,Tarnal Patra (cinamum leaves), Yastimadhu Heridra,Kustham,BrihatEla,Gugal, Almo, Tindu-Ieavesetc.

Ayurved the oriental science of health and medicinehas also recommended herbalSmoking as one of the important aspect of daily routine but not of tobacco and intoxicatingSmoking.

In place of tobacco Cigarettes in the market, which are harmful to health. NIRDOSH hasno adverse effect and keeps body and mind delighted.

We earnestly request you to try this beneficial preparation and be free from harmfuleffects of tobacco.

With all the good wishes from:

PRODUCERS OF NIRDOSH HERBALFILTIER

10

BHAVSAR'S HERBAL SMOKING DEVICE - NIRDOSH

Exhibit - III: Table - 1

(A)Ciearette and Beedi Consumption for the year 1979-80

Items Cigarettes BeedisEstimates 1

BeedisEstimate 2

Note: For Beedis two separate estimates were available.(B)

Another important source for consumption expenditure is National sample survey - ConsumerExpenditure Study rounds. One of the item of expenditures listed in the family expenditure tablerotates to PAAN, TABACCO, INTOXICANTS etc. According to NSS the private annualconsumption expenditure was follows (estimated at current prices)

Year Expenditure in Rs. Crores

1970-71 13791979-80 29341980-81 33851981-82 3675

Source: Business India, Sept.29- October 12,1980, p.35

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I) Annual Tobacco consumed 85mn.kg I25mn.kg 153mn.kg

2) Estimate of Smokers 25mn. 125mn. 125mn.

3) Annual Tobacco Consumed 3.4 Kg 1 Kg 1.23kgPer smoker

4) Average Tobacco content 1.06 gm 0.184 gm 0.277 gmPer stick

5) Average sticks smoked 3200 5424 5424Per year

6) Average sticks smoked8.76 14.86 15.00Per day

Bhavsar's Herbal Smokine: Device- Nirdosh

Exhibit- III : Table - 2

Production of Cie:arettesin India

Year No. of Cigarettes(in Cr pieces)

% Share of filter tippod

1980

1981

1982

1983

1984

1985(P)

7955.8

8683.8

9385.7

8044.5

8502.8

9000.0

26

30

29

42

46

46

Note (p). Provisional.

Source: economic Times, November 27, 1986.

Exhibit- III : Table - 3

Market Share Of Important Cie:arette Manufacturers 0986-87)

Source Business world -July 20-August 2, 1987,Volume p.34.

CMIE March 1996 - Market & Market Shares.

12

1984

Company Sales %Share Market Share in 86

ITC (India Tobacco) 622 57 46%

VST (Vazir Sulton) 149 13 17%

GTC (Colden Tobacco) 153 14 21%

Godfroy PhilIps 130 12 11%

National Tobacco Co. 45 4 3%

Others - - 2%

Source: Business World; July 20-August 2, 1987, Volume p.34

13

BHAVSAR'S HERBAL SMOKING DEVICE - NIRDOSH

Exhibit - III : Table- 4

Leadine Brands of Ciearettes in 1986

SNO. Brand Company Market Share1) Scissors ITC 15

2) Panama GTC 11

3) Gold Flake ITC 10

4) Charminer VST 8

5) Wills ITC 6

6) Barkeley ITC 6

7) Charms VST 5

8) Capstan ITC 4

9) Cavanders GP 3

10) Red & White GP 3

BHA VSAR'S HERBAL SMOKING DEVICE- NIRDOSH

EXHIBIT - III Table -5

Consumer Prices of various brands of ciearettes in 1986

Source: ITC Branch at Ahemdabad

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Brand Name (All ITC Brands) Suggested Retail Price Cost per Stick toto consumer for a pack Consumer

of 101 Honey Dew 1.70 0.172 Now 1.70 0.173 Barkley Filter 1.70 0.174 Strido 2.90 0.295 Bristol Filters (Regular) 3.00 0.306 Bristol Filters (king) 3.00 0.307 Wills Flake (king) 3.00 0.308 Wills Flake (Regular) 3.00 0.309 Capston Kings 3.00 0.3010 Gold Flake (Regular) 3.50 0.3511 Wills King 5.15 0.5212 Wills Filter (Tipped) 5.10 0.5113 Wills lights 5.25 0.5314 Gold Flake (King) 5.50 0.5515 Classic International (pkt.of 20) 15.00 0.7516 India Kings (pkt. of 20) 20.00 1.00

BHAVSAR'S HERBAL SMOKING DEVICE- NIRDOSH

EXHIBIT - In Table-6

Chane:esin monthly sales of cie:arettesin various price catee:ories

*There was an important change in excise duty structure which probably resulted in to the abovekind of shift

Source: India Today, February 15,1986, p.130

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.........--..""...........--- ---......-...A. Filters Before Now (Feb'86) % Change

Seot' 85

King size Premium Filter 543 450 -17Price before sept'85 40-50

paisaPrice Now: 60 paisa

King size Popular Filter 975 1170 +20Price before sept' 85 25-30

paIsaPrice Now: 25-35 paisaReguler Premium Filter 970 715 -26

Price before sept' 85 25-30paisa

Price Now: 35 paisaPopular Regular Filter 1109 1265 +14

Price before sept' 85 15-20paIsa

Price Now: 20 paisaB All Non Filter 4555 3500 -23

BHAVSAR'S HERBAL SMOKING DEVICE- NIRDOSHExhibit-IIITable - 7

Demoeraphic Profile of Smokers of Various Brands in Earlv 1970s

The Prices of the brands were these prevailing in 1906. While the profile of smokers wasprepared from brand-smokers study conducted in early 1970s.

** This percentage is calculated out of total smokers of that brand. For example for Bristol66% of smokers were of the age below 35. It means Bristol smokers are comparativelyyoung than smokers of other brands. Similarly Gold Flakes smokers are probably olderpeople as on 27% of smokers are below the age of 35.

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Brands Price* Ago (Years Percentage Education Occupation (Percental!e) Monthly IncomePkt of Avg Modian Smokers aged Percentage (Ave.) Modian10 Up to 35 Metric & Manual Small White Others Rs. Rs.

years** Above Traders Collar1. Honey 1.65 40 40 39 21 61 10 21 5 100 257 222

Dew2. Berkeley 1.75 33 37 47 38 38 18 39 6 100 340 2653. Charminar 2.00 37 36 49 32 48 16 27 9 100 257 2084. Panama 2.00 36 36 53 53 33 16 44 6 100 374 2805. Wills 3.25 37 36 51 83 4 16 73 7 100 603 465

Flake6. Capstan 3.50 42 42 33 66 15 18 59 8 100 512 3717. Gold 3.50 40 39 43 17 53 14 28 4 100 209 190

Flake8. Cavendors 3.50 36 35 53 26 50 21 24 5 100 272 233

(Mag)9. Bristol 3.50 32 31 66 69 26 12 50 11 100 376 290

Filter10. Wills 5.50 34 32 63 80 10 10 62 11 100 930 745

FilterTipped

11. Four 5.60 36 34 53 69 21 12 57 9 100 491 302

squareKing

12. Gold 6.50 40 41 27 91 2 13 00 5 100 1040 1040Flake((Kind)

13. India 20.00 40 39 40 90 - 6 02 12 100 1572 1614

Kings(Pkt of20)

BHAVSAR'S HERBAL SMOKING DEVICE- NIRDOSH

Exhibit-III Table - B

Media Habits of smokers of specific brands in earlv 1970s

(In percentage)

Source: An early I980s Study

17

Brand News Paper Magazine CinemaReading Reading Going

1. India Kings 99 73 672. Gold Rake (King) 90 70 603. Wills Filter 95 66 694. Bristol Filter 05 47 715. Panama 00 39 506. Cavenders (Mag) 66 17 407. Charminar 67 27 518. Honey Dew 63 13 399. Barkeley 81 44 6110. Wills Rake 93 64 7311. Capstan 87 42 5112. Gold Rake Regular 42 7 2013.Four Square Kings 07 45 50

BHA VSAR'S HERBAL SMOKING DEVICE- NIRDOSH

EXHIBIT - III Table -9

Images and attributes of cigarette brands examined in early 1970s study

Source: Earlv 1970s study of cigarette smokers.

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A. List of image dimension B. List of attributes on which cigarettewere rated

1 Rather Mild Strength2 Pleasant Flavor Flavor3 Tasted Nice Taste4 Smooth Filling5 Satisfying Satisfaction6 Easy Draw Draw7 Firmly Filled Smoothness8 Attractive Pack Pack design9 Reasonably Priced Price10 For heavy smokers11 For modem People12 Likely to be more popular

BHAVSAR'S HERBAL SMOKING DEVICE- NIRDOSH

EXHmIT- III Table-10

Channels of distribution used bv ciearette companies

Channel of Distribution- ITC/VST/GP

Company

I- Super Wholesale DealerlDistributor

Wholesaler

Secondary wholesaler

lRetailers

Mobile Sales Van Dealer

Retailers

*GTC/NTC have an additional link between the wholesale dealers. He is the super wholesale dealer.

Notes:

l. According to census of establishment 1971, there were 23 lakes retailers (5 lakh urban+ 15lakh rural) involve in retail trade in food and food articles, beverages, tobacco, intoxicants.

2. According to ORG census of outlet 1969, there were about 240000 pan-bidi shops, 40% ofwhich were in towns about 20000 population and 60% were in villages.

3. According to Business India (January 20-February 1985) report on "Charms" VST had a sotof 500 wholesale dealers through which its product were distributed.

4. According to universal cigarette case written in 1967, a large city (60 sq. miles) waspurchasing about 10m. cigarettes a month. In that city the distributor sold cigarettes to some160 wholesalers who in turn sold to some 9000 retailers.

5. According to Business India, Jan. 16 - 31, 1982 ITC was dealing with 41000 wholesalers.6. According to 1987 lIMA students' SDM Reports, GP was selling to 150 semi wholesalers

whichreach4700pan-bidishops,via semiwholesalersas well as 20 SM In Ahemdabadtheconsumers reached were 45 lakhs.

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BHAVSAR'S HERBAL SMOKING DEVICE- NIRDOSH

Exhibit-IIITable-11

Advertisine bv Ciearette Manufactures

1. Annual Advertising expenditures of two well know cigarette companies was as follows

a) ITCb) VST

Rs. 4 crores for 1985-86 in 86-87 Rs.5.85 cr.Rs. 1.16 crores for 1984 in 86-87 Rs. 3.99 cr.

2. Advertising expenditure experience on introducing a new brand was available about"CHARMS" of VST. In the first year of launching Rs. 25 lakhs were spent on advertisingCharms. The campaign made much heavier use of color inserts in newspapers, as well asconsiderable emphasis on outdoor display in hoardings or at the point of sale. Life styleadvertising was used bringing in so called "damix cultures" probably as a symbol ofyouthfulness and liberation. Charms proved a successful brand whose sales moved from 50million a month in mid- 1983 to 300 million a month by end of 1984.

3. VST has always prided itself on being in the forefront of sponsoring of sports and theperforming art events. It spent a significant proportion of its budget on such activities.

4. The government has put a ban on advertising of Cigarettes on the TV. Also the industry hasdecided not to advertise on the radio.

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BHAVSAR'S HERBAL SMOKING DEVICE- NIRDOSH

Exhibit-III Table-l

Medical Doctors. Hospitals and Dispensaries

· Total number of Ayurvedic hospitals and dispensaries (not included in these figures), were329 and 12288 respective as on December 31,1983.

** In addition to these doctors, on 1stJanuary 1983, there were several categories of doctorsregistered under Indian system of medicines. There were 2.321akh ayurvedic doctors, 1.16lakh homeopaths, 0.28 lakh Unani, 11,500 siddha and 106 naturopathy doctors.

Source: 1 CMIE, August 1987. Basic statistics relating to the Indian Economy.2 Health Statistics of Gujarat, 1987.

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Year Allopathic System of Medicine

Lakhs Registered Doctors Hospitals Dispensaries

Per Lakh of Popn.

1950 0.59 16.5 2717 68911970 1.39 25.8 4239 105081975 1.98 33.0 4023 112951980 2.63 38.2 6670 159681981 2.69 39.3 6804 167511982 2.72 39.6 6897 174091983 2.84** 41.5 7189* 21777*1984 2.97 43.4 7369 218721985 - - 7297 25808

BHAVSAR'S HERBAL SMOKING DEVICE- NIRDOSH

Exhibit-III Table - 2Market Potential for Pharmaceuticals & Avurvedic Products

1. Proiected Demand of allopathic Bulk Drul!s & Formulations in India(Rs.crores)

Year Bulk Drul!s Formulations

1984-851989-90

6651033

24504800

Source: IDMA Bulletin (Pharmaceutical Industry in India- Index 8, Gujarat).

2. The case Associated Chemicals written around 1979-80 estimated total coughsyrup market to be of the order of Rs. 12 crores, and Balm market of the order ofRs. 13 crores.

3. RIll.:s annual report, gives date about lozenges production of the value ofRs.5Y2crores in 1984. Therefore, the cough drop market might be of the order ofRs. 10 to 12 crores. It also reports that ointments and creams RIlL had producedwere of the value of Rs. 15 crores in 1984. The balm market therefore mighthave grown to the size ofRs. 18 to 20 crores.

4. Reckitt & Colman annual report indicates the production of analgesic tablets ofthe value of Rs. 2.6 crores in 1983. Probably Analgesic tablet market thereforemight be of the order of Rs. 10 crores.

5. One hears interesting stories of Dabur, Vaidyanath and other leading ayurvedicproducts' manufactures. Dabur is considered a very large firm with turnover ofmore than 50 crores.Even Zandu a comparatively small firm had a sales volumeof about 7 crores in 1984. In other words the market for ayurvedic productscould be that of more than Rs. 100 crores.

Note: Nirdosh had beneficial effect on persons suffering from the followingailments: Cold, Cough, Fever, Asthma, Tonsillitis, Premature Graying of hair,Insomnia, Toothaches, Weak Gums, bad odour, Gastric problems etc.

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..

BHAVSAR'S HERBAL SMOKING DEVICE- NIRDOSH

Exhibit-III Table - 3

lllustrative Examples of Products for two of the ailments

I. Anti Asthmatic Drue:s:

II. Coue:h Medicines:

Source: Indian Pharmaceutical guide, 1985

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Medicine Form Qty Price to Retail ManufacturerRetailer Price

1. Asthaline Liauid 100 ml 6.69 7.50 Cipla Labs2. Asthalite Tablet 10 Tabs 3.24 3.79 Litake Labs3. Asthanol Tablet 10 Tabs 2.55 3.00 Lincoln Pharma4. Asthma - 50gm 5.45 6.52 ZanduReliever

Medicine Form Qty Price to Retail ManufacturerRetailer Price

I.Couh Lozenes Tablets IOxiO 8.00 10.56 Briht Pharma2.Cough Nashak Liquid IOOml 3.60 4.50 Dharmani

Dawakhana3.Cough Mixture Liquid 450 ml 18.54 20.26 Sponcor

Pharma4.Vicks Cough Liquid 90ml 3.82 4.18 RichardonMixture Hindustan5.Cough Lozenges Lozenges 4 Lozs. 1.54 1.84 -Do-

BHAVSAR'S HERBAL SMOKING DEVICE- NIRODSHExhibit- V

TERMS AND CONDITIONS

Gram: NORDOSH Tele: 24733MAANS PRODUCTS (INDIA)

244,Gheekanta Roads, Ahemdabad-380001Price-List of Nirdosh Herbal Filter Beedi

Effective from 1stDecember 1984

Sr no. Packine Details1. 10 Pes. In one packet2 10 Packets in one Plastic Pack

3. 20 Plastics Packs in One Carton4. 40 Plastics Packs in One Carton5. 80 Plastics Packs in One CartonThe suggested consumer price per pack is 2.50

Rate Unit2.00 Packet

20.00 10 Packets400.00 Carton800.00 Carton

1600.00 Carton

TERMS

I. Availability2. Delivery3.Sales-Tax4.Payment

:From your ready stock.: By VPP at our cost, if minimum order is for 60 packets or more.: Rates includes all taxes.: Cash/Draft against delivery.

NOTES

1. Against minimum order of 200 packets i.e. our smallest carton (at a time), above-mentionedrate is applicable.

2. Rs.2.15 per packet will be charged, if minimum order is for 50 packets or more, but lessthan 200 packets

3. Minimum 10 packets will be sent by VPP.

4. NIRDOSH is free from Tobacco and Nicotine and this antibeedi is made of the variety ofherbs in accordance with Ayurvedic prescriptions to tone-up throat, lungs and nerves andfumes of these herbs cures bronchitis, cold headache and insomnia.

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BHA VSAR'S HERBAL SMOKING DEVICE- NIRODSHExhibit-VI

Current Advertisine Rates (1986)

I.Newspaper Advertisine: Daily-

a) Times of India, Bombay, whose circulation was about 2.89 lakhs was charging Rs 105 percolumn Centimeter. This probably would work out to be about Rs.12000 for a quarter pageinsertion (total printable area is 456 col.cms) A fill page would cost Rs48000/-

b) Gujarat Samachar from Ahmedabad whose circulation was 2.97 lakhs was charging Rs 100per col.cm.The quarter page therefore would cost Rs 10800/-

c) Janwani a Kannada newspapers with circulation 21000 was charging Rs.14 per col.cm.Aquarter page would cost RsI428/-

d) Two other southern vernuacular papers were having Rs.28 and Rs.29 per col.cm.However,Matrubhumi a Malayalam paper with 4.5-lakh circulations was charging Rs.I 05 per col.cmBengali Anand Bazar Patrika with 4.1-lakh circulations was charging Rs.125 per col.cm.Hindi Navbharat Times was Rs.80 per col.cm.

2.Maeazine:

a) A full-page black and white ed.in "Illustrated Weekly" (English) would cost Rs 10500.(circulation 1.14Iakhs), "Chitralakha", a Gujarati weekly having 2.5 lakh circulation cost Rs10000 for a full page Ad .The full page rates for "Dharmyug"(circulation 1.41 Lakhs) was9800/-, "Malayala Manorama"(circulaton 5.55 lakhs), Rs 10000, Sports week (circulation0.44 lakhs), Rs 3500/-

b) In fortnightly "India Today"(3.16Iakh circulation) full page ad. Would cost Rs 21000, whilebusiness India (0.61 lakh circulation) Rs 11000, Femina (0.65 lakh circulation) costRs.6500/-

c) Monthly Stardust (1.45 lakh circulation) full-page ad. cost Rs 15000.

3.Radio Advertisine:

A 7 seconds spot announcement cost ranged from Rs.30 to Rs. 80 per insertion in various categories ofcity stations. 15 seconds spot announcement cost double that of 7 seconds and a 30 seconds spotannouncement cost 4 times that of 7 seconds spot.

For a lower category of these slots, the cost was nearly 2/3 to % of the above rates. While for asuperior category the cost increased by 15 to 25%.* Source- Year Book-I956, Publication

25

4.Doordarshan:

The standard spot is a 10 second .one. There are four classifications in terms of time slots. In thenational network the IO-second spot would cost Rs 15000 to Rs 45000 depending upon one ofthe four classifications. Cheapest is Srinagar, Gauhati which ranges in cost from Rs 1000 to Rs2500. Nagpur, Jalandhar and RT costs nearly double that of Srinagar and Gauhati. Delhi and RTranged from Rs 5000 to Rs .25000, Bombay and RT ranged from Rs 4000 to Rs 15000 whileCalcutta, Madras, Bangaloru, Trivandrum, Hyderabad, Ahmdabad, Lucknow and RT rangedfrom Rs 2000 to Rs 6000/ -

5.0utdoor Advertisine:

a}Hoardines: Monthlv Rental

For a standard hoarding of 20'x 10' rental rate per month was Rs 2000 for Madras Rs.2500 for Calcutta, Rs 3000 for Bombay Rs. 6000 for Delhi. For Smaller cities with populationbetween 1 to 5 lakhs the rate was Rs 350 per month while for 5-10 lakhs city it was Rs 600 permonth.

b)Bus Panels: Monthly Rentals Back Panels

The monthly rental for a 36" x 38"back panel for a Bombay Bus was Rs. 225, whilefor Ahmedabad bus panel of 72" x 36" it was Rs 415. For Pune for 60"x 36"the rate wasRs.65 while for Calcutta for 72" x 30" rate was Rs.150/- Delhi Bus 66" x 34"the rate was Rs350/-.

Monthly rental for side panels were Rs 400 for 240' x 27' Bombay Bus Pane: Rs 80for 216" x 24" Ahemdabad bus panel; for Calcuttta 120"x 24" Rs. 200; Delhi 120"x 24"Rs.150 Pune bus 192"x 24" was Rs.80/-.

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BHAVSAR'S HERBAL SMOKING DEVICE- NIRODSH

Exhibit.VI

The Cost Structure for Nirdosh*

l.Raw Material:

a) Herbs for 1000 Cigarettes cost Rs 150.00.Herbs for I packet (10 Cigarettes) Rs 1.50b) I packet ** =RsO.25c) Packaging paper @ Rs 120 per ream

One Ream= 144 sheet (20" x 30")One sheet =20 packets

Packaging paper per packet= Rs.0.04Total Raw Material Cost per Packet =Rs1.79

2. Labor:

a) Rate for rolling 100 cigarettes= Rs 3.50Cost of rolling one packet (10 Cigarettes)=Rs.035

b) Raw material preparation and packaging =Rs 0.10

Total Labor cost per packet= Rs0.45.TOTAL MANUFACTURING COST=Rs.2.24//packet

* The estimates presented here were based on the best judgment of owner of Maans Products.

** The box used for packing the cigarettes.

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