Case Study on Consumer and Competition
Swan Textile Mills Ltd Mr. Advani is a young sales manager in a popular textile mill of Mumbai-Swan Textile Mills Ltd. The company sells directly to retailers all over India. Recently, Advani faced tough sales objections from southern retailers. The objection is, we can 'get the same patterns and fabrics cheaper from Swarna Textile Mills Ltd, Mumbai.' Advani found that the truth in their statement. Swarna Company copied systematically and even printed a trade mark 'Roshini' (similar to the trade mark 'Rohini' of Swarna Company at the edge of each yard of the fabric. They supplied their cloth at one-third the price. As sales started slipping, he thought of a strategy to prove the quality of Swan products. Advani devised a simple demonstration to prove the qualitative difference between the two products. He took fabric samples from both fabrics and, demonstrated the differences and explained the reasons. He asked the retailers to find out the customers' views after 2-3 washings of Roshini Brand. Within a month after this demonstration, the irate housewives in the south flooded retail shops with complaints that the cheap Roshini fabric, lost its luster and started falling apart after 2 or 3 washings. They started demanding 'Rohini' and no 'Roshini' brand fabrics. Sales of Rohini shot up in a few weeks.
Answer the following:
Q1. If you had been in Advani's place, would you welcome or fear this objection? Why?
Q2. Could Advani have prevented the initial drop in sales of Rohini through better planning?
Q3. Would this approach be possible in other markets? Taken from Bangalore University's second semester MBA examination, September-October 1999