Hi everybody. Haldiram is one of the most
iconic brands in Indian business history. And while most of us are taught about the
American icons like Domino's and McDonald's, very few of us know about the world class business
strategies developed by the homegrown brands of India. And Haldiram is one such brand that
started as a small sweet shop in Bikaner, but today, it has expanded its presence in more
than 80 countries, employes more than 1500 people. And in FY 19 alone, Haldiram generated a sales
revenue of $1 billion. The question is while we see 1000s of sweet shops every single day, What
exactly was so particularly special about Haldiram that they were able to build a billion dollar
business? What exactly was their business strategy and as students of business? What are the lessons
that we need to learn from this iconic brand? This video is brought to you by my bill book,
but more on this at the end of the video. This is a story that dates back to 1990 Bikaner.
When Haldiram was just 11 years old. He worked at his grandfather's bhujia shop and being a marwadi,
he soon enough started finding ways to make money for his family. Back then bhujia in Bikaner was
an extremely commoditized product, which means what since there were hundreds of bhujia shops in
bikaner, there was hardly any difference between their products. Therefore, the competition was
solely based on the price and not on quality. During this time, Haldiram would take up odd
jobs such as chopping and clean the kitchen, and he gradually began to take interest
in the making of the bhujia. Originally, the tasty bhujia was actually made by one
of the daughter in law's of the family. And soon enough haldirams grandfather
realised the potential of this product, and he took it to the market. And as soon as this
product hit the market, the bhujia started selling very well. And as soon as they started making more
money, the entire family was extremely happy. But Haldiram was the only member who was not at all
satisfied neither of the penny profits, nor with the taste and quality of their product. because
deep down he still felt that bhujia was not good enough. And he wanted to make something that was
far away from the rest of the competition. And he wanted his product to be not just yet another
bhujia among the hundreds of bhujia in the market. And right away, driven by this insane obsession
for a high quality product, this little boy started working very hard, and started
experimenting with different ingredients in search of a mind blowing product. And that is when
many, many iterations later Haldiram was able to make three changes to the bhujia that changed the
destiny of his family forever. The first change he made was that instead of making bhujia out of
besan, he started making it out of Moth Ki Dall. And this made bhujia extremely delicious, turning
it into a delicacy overnight. In addition to that, instead of making them soft, he started making
them into fine crispy mixture so that it could give people an enhanced experience of eating
bhujia and at the same time, it could make the customers feel something different from the
conventional bhujia sold in bikaner. Secondly, because this bhujia was extremely commoditized he
started selling his bhujia at a 150 percent extra cost at 5 paise per kilo as compared to the market
price which was just 2 paise per kilo. And lastly, he named his bhujia as Dungar Sev which was
named after that then Maharaja Dungar Singh. And these three changes ladies and gentlemen
gave Haldiram three superpowers over his extremely crowded competition. Firstly, the name
dungar by default made this bhujia sound like a delicacy that people would want to try. And this
is because, although the name dungar did not have any connection to the Maharaja, it acted like a
brand ambassador for the bhujia. Therefore, the perceived value of the product was enhanced by a
large extent. Secondly, because of this increased perceived value, people do not mind paying three
paise extra because they by default assume that they were buying a premium product. And third and
most importantly, after we people pay the premium for the bhujia after perceiving it as a better
product. When they actually tasted it, the bhujia genuinely turned out to be absolutely delicious.
As a result, the demand for Haldirams dungar sev skyrocketed within just a few weeks. If you see,
this is a textbook execution of one of the most powerful principles of marketing which says that
brand perception plus a tangible value delivery results into brand value. In this case, by hearing
the name of dangar Maharaj, haldirams bhujia attracted more customers due to the enhanced
perceived value after that, when it actually tasted great customers and wholesalers do not mind
paying three paise extra per kilo. So if you see, the three paise extra or the 150 percent premium
cost was the brand value of Haldiram's bhujia. And this turned Haldiram's bhujia into a leading
product in a highly commoditized bhujia market. And within no time, hundreds of kilos
of Haldiram's bhujia started to be sold. This was the founding pillar of
the incredible Haldiram story. The second pillar of Haldiram growth was actually
lead by Mr. Shiv Kishan Agarwal in the late 1960s. And he belonged to the third generation in the
Agarwal family. Until this point, the family have separated into three discrete businesses
which were in Bikaner, Kolkata and Nagpur and when Bikaner and Kolkata were doing very well,
Shiv Kishan was struggling to sell bhujia in Nagpur because the demand for snacks in general
was not very high in Maharashtra. Therefore, he decided to take a step back and got back on the
ground to do a thorough market research about the food habits of the maharashtrians and that is
when, after making countless visits to the most popular stores in Nagpur, Shiv Kishan identified
three major opportunities in the market. The first thing he realised was that maharashtrians had not
been exposed to more than a few savoury snacks. And this presented him with a huge opportunity to
be a first mover in the market. But at the same time, just like any other first mover, the trust
factor or the hesitancy of the people was a major obstacle for market penetration. The second
gap he identified was in the sweets market, and he noted that the most popular shops in
Maharashtra mostly sold only bhalushahis Gujarati pedas, Mysore pak and ladoos. This is when he
realised that the maharashtrians definitely had a sweet tooth that could be exploited further.
And thirdly, Shiv Kishan realised that because the variety of sweets available in Maharashtra
was very less, there was immense scope for hundreds of sweet delicacies from other regions
that could be leveraged for market penetration. So guess what? He started by making his favourite
sweet using thickening of milk, sugar, dry fruits, cashew nuts and saffron. And this is what
ladies and gentlemen gave rise to the iconic Kaju Katli in Maharashtra. And Shiv Kishan started
aggressively promoting the dish by giving out free samples and by encouraging every customer to taste
the dish. Soon enough, the word of mouth spread and the sweet began to achieve extraordinary
levels of popularity. In fact, in one of the interviews, Shiv Kishan said that it first started
with people buying 100 grams then it went up to 200 grams, and gradually people started buying
500 grams of Kaju Katli per customer. In fact, the flavour was so well accepted and loved that
they were flooded with demand for Kaju Katli. Soon enough, he introduced the logus to the delights
from Bikaner and Calcutta like malai ladoo, rasgulla and rasmalai. And not so surprisingly,
his Maharashtrian customers couldn't get enough of Haldiram bhujia wala sweets. And within
just three years, their sales shot up by 400% going from just 100 rupees per day to 500 rupees
per day, which in today's world is by the way, equivalent to 12,000 rupees of sales per day. Now,
while most of us would be extremely satisfied with this crazy amount of sales, Shiv Kishan did not
stop there. After serving the market further, he realised that South Indian snacks like Dosa
and Idli were extremely popular in Nagpur. So he immediately started a South Indian
restaurant for customer acquisition reasons. And when more and more people started visiting
his restaurant, he slowly introduced Samosas and Kachoris. And this time, it did not take a lot of
time because samosas and kachoris became standard fast foods in Maharashtra. This is how Shiv Kishan
achieved market penetration in a seemingly unknown market with his brilliant business strategies. Now
in business terms, what he basically did was that he build a golden bridge to move the customer
sentiment from scepticism to delight. So initially, he was an unknown vendor selling
unknown dishes because of which people are sceptical. As a result, market penetration was
extremely difficult. So what did he do, he first started selling known dishes and establish
the trust with the customers. And as soon as he owned the trust of the customers, he brought
in the X Factor that no other known vendor had. And that were the brilliant dishes, which were
completely unknown to the audience. As a result, the customers embraced his dishes with open
arms. In fact, they were super delighted, because a trusted guy was brilliant enough to
present many new dishes. While the rest of the known guys were presenting the same old stuff.
This was the magic of Shiv Kishan's execution. And this is what brings me to the third pillar
of haldiram's growth that was nothing but packaging and location. And these two changes were
brought by another third generation member named Manohar Lal Agarwal. And when executed, it
led to exponential sales because of something called brand recall value. Long story short,
when you see a lot of guys delivering food, wearing zomato t shirts, you automatically tend
to believe that Zomato is a trusted brand. When you see a lot of images of the same book cover
on social media and many other places, it is very likely that that might be the first book you
read. A very simple example of the same would be Dale Carnegie's How to Win Friends and Influence
People, and the subtle art of not giving an F. Similarly, when you see a lot of people
buying or gifting Haldiram bhujia Wala sweets, they automatically become mini banner ads
to make you feel that the Haldiram brand is extremely trusted. And this strategy, ladies
and gentleman, was a game changer back then, because in the 1980s, nobody in the
market took packaging seriously. So when Manohar Lal executed this strategy,
Haldiram bhujia Wala was not just shipping 1000s of products, but they also shipped 1000s
of mini billboards that made the brand stand out and established trust both with the customers
and the sellers. And when this was combined with strategic placement of stores in densely populated
places like the railway station, the sales numbers went crazy. To tell you about it, In just five
years, by 1981, the production of Haldiram had shot up by 400% to 3000 kilos per month, and
people from all across the country came in and asked for Haldiram bhujia Wala specifically, and
soon enough, the brand logo started travelling through the length and breadth of the country.
And this is when people of Bikaner and Nagpur view that Haldiram bhujia Wala was not just a small
sweet shop, but an iconic brand in the making. And from here onwards, despite many challenges,
there was no looking back for the Haldiram brand. As a result, today Haldiram is a humongous brand
valued at $3 billion with the signature dishes, making impact not just in India, but in 80
countries all across the world. And this is how three generations of the Agarwal family
laid a solid foundation to build a 5000 crore business empire. And this is what brings me to the
most important part of the episode and that are, the lessons from the case study and the study
materials to help you read further about them. Before we move on, I wanted to tell you about
this one skill of Haldiram founder that I was personally fascinated by. And that was his
focus on accounting and inventory management. Because these two factors are extremely
critical for any business irrespective of its size. And that is where our partners
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description. Now let's talk about the lessons from the case study and the study materials to help you
dive deeper. Lesson number one, while most people think that there is no scope for brand building
in a commoditized market, you need to realise that a commoditized market is perhaps the best
place to build a brand because once you do it, you're going to stand out and that is going to
skyrocket your sales in no time. In this case, it was haldirams acumen to build a brand
name for his bhujia among the hundreds of bhujia sellers in Bikaner. Lesson number two,
while most of us love to play on our strengths, sometimes we need to realise that
in order to play our strengths, we first need to cater to the demand in the
market. In this case, if you see, even after 20 years of running a family business just around
bhujia it was Shiv Kishan's strategic approach to first establish trust with the customers by
selling sweets. And then he came full circle by selling South Indian snacks eventually to sell
North Indian dishes like samosas and kachori. And this eventually helped him stand out from the
rest of the competition. And lastly, we all need to realise that healthy obsession often turns work
into art. And regardless of what you do, if it is pursued with a certain degree of craftsmanship
even if you're selling something as seemingly insignificant as bhujia it can help you build a
billion dollar business. And before I say goodbye for further reading, I would highly recommend it
read this wonderful book called bhujia barons, which is what I referred while curating this
content. That's all from my side for today guys, if you learned something valuable, please make
sure to hit the like button in order to make YouTube Baba happy and for more such insightful
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watching. I will see you in the next one. Bye bye